YANGON — Per January 1, the Ministry of Commerce will require car importers to apply for import licenses prior to shipping as part of a government effort to reduce the storage of vehicles at Thilawa Port, state media announced on Wednesday.
Thousands of cars have been parked for months at the port area because importers tend to wait with seeking a license and picking up cars until they have found buyers for their vehicles, according to ministry officials cited in The Global New Light of Myanmar.
Currently, importers are allowed to ship in cars to Thilawa Port and apply for an import license upon arrival of their vehicles, which in the meantime can be parked at docks. Parking cars at the port benefits some of the importers as they lack storage space or a showroom.
“Though some people have received a [import] permit from the ministry, they didn’t pick up their cars from the docks. Also, some importers keep their cars there while correcting their import permit submissions, so there are many cars crowding the docks,” a Commerce Ministry official was quoted as telling state media.
Once an import license is granted, a car has to be picked up from the port area within three months, or customs authorities may impound the vehicle. Authorities hope that by requiring importers to apply for licenses prior to shipping, car dealers would pick up the vehicles sooner.
Myo Zin Win, the general secretary of Myanmar Car Dealers Association, estimated that currently some 6,000 vehicles have been parked for months at Thilawa Port. He said both local car dealers as well as foreign-owned businesses were contributing to the problem.
Most cars imported into Myanmar are second-hand vehicles from Japan, which are popular due to their quality and affordability.
Myo Zin Win said many of the parked vehicles were being imported by Pakistani businessmen based in Japan, adding that they would register as a Burmese company with the help of a local business partner. These importers, he claimed, often lack storage facilities for cars and prefer to keep them at Thilawa Port.
“Many foreigners import many cars from Japan first, and then they don’t pick them up from the docks while they look for buyers,” he said, adding that these businesses were involved as car import requirements are less strict for foreigners than for Burmese nationals.
“We welcome the new policy restrictions on import permits,” Myo Zin Win said. “It will be take time if the new policy starts next year, but it’s good for local importers.”
President Thein Sein’s reformist government in 2011 began easing junta-era car import restrictions that had put foreign vehicles out of reach for the vast majority of Burmese. The years since have seen imported cars flood the market, the vast majority of which have been used vehicles from Japan.
According to Ministry of Commerce figures from November, there are about 600,000 vehicles on Myanmar’s roads, some 100,000 of which are trucks.
Tun Myat Nyunt, a businessman from Yangon who helps connect car importers with buyers, said the new government measures would raise the costs of importing cars, especially for smaller dealers who lack space to store vehicles.
“Many importers can only afford to invest in car buying and shipping charges right now, so starting next month… small importers will face problems,” he said.
Tun Myat Nyunt said falling consumer demand and prices for cars is another factor that caused importers to keep their vehicles at Thilawa Port.
“There is less demand, that is one reason that prices are falling,” he said, adding that prices had fallen with about 10 percent compared to last year.
The Burmese government maintains a complex set of rules on car imports, with different arrangements for individual importers, companies, foreigners and Burmese nationals. It also has a so-called substitution system that allows the owner of an old car to import a new vehicle if he disposes of the old one.
Car dealers have complained that government rules on imports are cumbersome and subject to frequent change.
Source: The Irrawaddy