A domestic car production industry may take shape in the future as a national plan is drawn up, though for now imported vehicles dominate, according to experts.
Neighbouring countries such as Thailand have had success with their own auto assembly plants. Myanmar has also experimented with its own domestic production efforts – the results of which in some cases still ply the country’s roads – though they have fallen out of favour, with consumers been quick to shift to foreign imports as they become increasingly available.
Myanmar Engineering Society patron U Khin Maung Kyaw said there are about 85 million cars produced worldwide each year, of which 4.5 million are made in ASEAN – mainly Thailand, Malaysia and Indonesia.
“These countries sell vehicles to the local market and also abroad,” he said. “As for Myanmar, even if we can’t export to another country, we should try to decrease imports from them.”
Past attempts to assemble cars locally using imported parts had been unsuccessful as the vehicles were generally of poor quality. In the future, Myanmar will attempt to lure foreign auto manufacturers to set up shop in the country rather than restarting domestic companies.
The Myanmar Engineering Society has been drawing up an automobile policy for the last two years with government input, hoping to build a foundation for an auto industry.
“Lots of people are interested in cars,” said U Khin Maung Kyaw.
Drawing international manufacturers to set up shop in Myanmar will be difficult, with few confirmed plans for a factory in the country.
Japanese automaker Nissan announced in September 2013 that it will begin manufacturing Nissan Sunny cars by 2015 at a plant in Bago Region, with maximum production of 10,000 vehicles a year. Other automakers say they may set up in the future, though note that challenges remain.
Earlier this year, Hisayuke Inoue, president of Toyota Asia Pacific Engineering and Manufacturing, said the company has no plans to build a plant in Myanmar in the next five years, though may in the future consider an investment.
Part of this is due to anticipated tax reductions under the ASEAN free trade area, which will mean vehicles produced in places like Thailand will be able to be imported to Myanmar duty-free.
U Khin Maung Kyaw said car factories require huge investments but would also significantly boost GDP.
“We can get revenue and Myanmar citizens can get jobs,” he said. “If we import from other countries, we must pay a lot of money to others.”
“Foreign investors like Myanmar’s situation. We have a lot of land and human resources. But they dare not invest because Myanmar has no law or policy for the automobile industry.”
U Khin Maung Kyaw said he hopes to have a policy ready for the hluttaw’s approval in early 2016.
“Myanmar has so many good points and we can build an industry by cooperating with foreign countries,” he said. “We are carefully considering our automotive policy so foreign investors want to invest.”
Source: MYANMAR TIMES