Trade-ins drive jeep demand

While factories producing Myanmar-made jeeps have mostly closed, demand for the iconic vehicle lives on – propped up in part by a government trade-in program.

Up to 25 varieties of jeeps and light trucks were made in the country prior to 2011 using imported, often secondhand parts, but the gradual opening of the vehicle imports market saw local assemblers of brands such as Shan and Dagon mostly halt operations.

The government has been issuing vehicle substitution certificates – commonly called a “slip” – allowing the owner of older vehicles to hand the vehicle to authorities and in return receive permission to import a new car.

The policy, put in place to encourage the jeeps to be taken off the road in favour of a modernised fleet, has had the side effect of introducing a secondary market for slips, with each slip – and vehicles eligible for slips – trading for up to several million kyats.

Deputy rail transportation minister U Chan Maung said in the Pyithu Hluttaw in June that owners of many locally made vehicles will be eligible to receive slips this year.

Currently, many of the locally made vehicles are not eligible, as they were built relatively recently.

However, locally made vehicles with number plate “1 ka” have been accepted for trade-in since April 4 and prices have reached over K10 million (US$10,256), while the price for vehicles with plates beginning with “2 ka” has topped K9 million after the Road Transport Administration Department posting on its Facebook page that trade-ins for the slip could begin this October.

Customers have bid up the price of the jeeps, which usually trade for around K4 million with a non-eligible plate number, in order to obtain slips.

The vehicles with “1 ka” or “2 ka” plates are expensive, but if all locally produced jeeps could be traded in for slips the price would likely decline, said U Win Myint Oo, a Mandalay car dealer.

The program giving slips in return for handing over specific older vehicles was announced in September 2011, though importers were initially confined to models made from 1999 to 2006 until a 2012 rule change.

U Kyaw, the owner of a locally-made jeep, said many people would like to purchase the cars, which are often quite affordable, but are unable to do so due to supplies being taken off the market through the slip program.


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