Mercedes-Benz builds the new car market

Well-known German automaker Mercedes-Benz is working to find what cars click with local consumers.

It has imported about 20 different models in the two years since it opened its first showroom in Myanmar. U Aung Thet Lwin, head of sales and marketing at Cycle & Carriage Automobile Myanmar, the local distributor of Mercedes-Benz, said that the market for brand new cars is still developing, and companies such as his are still working to meet local tastes.

“There is uncertainty with building the brand-new market, but our brand has been familiar with Myanmar people for many years,” he said.

Cycle & Carriage Automobile Myanmar is a joint venture company between Jardine Cycle & Carriage, a Singapore-listed company that is part of the Jardine Matheson Group and a local company, Automobile Century. In Myanmar, the firm has distribution rights to Mercedes-Benz passenger cars, vans, trucks and buses, as well as Fuso commercial vehicles, and Mazda cars.

Locally, Mercedes-Benz battles the perception that its prices are high and the vehicles are only for the highest income earners. Domestic consumers are particularly price sensitive, and U Aung Thet Lwin said Mercedes-Benz has been working to extend its offerings to a wider target market.

Over the past two years, the Mercedes-Benz C class and E class of sedans and GL class of SUV have been the firm’s most popular local sellers. It is also working to build popularity for other models, having recently held an event to showcase its new GLA Class: GLA 180 and GLA45 AMG SUV.

“Mercedes-Benz has products for different market targets,” he said. “They produce models for both the high end and at a fair level.

“In this market, everyone is looking for a reasonable price.”

There has been significant pent-up interest in buying cars. The government had heavily restricted vehicle imports before 2011, though that year’s change in policy and subsequent moves to allow foreign car companies like Mercedes-Benz to set up showrooms has led to a surge in sales.

“The trend in the car market has already changed,” said U Aung Thet Lwin. “Buying cars is no longer an investment; now people buy them for their daily use. We hope the market will develop further. The important thing is the government should support citizens as possible so they can buy brand-new cars.”

Some critics have said the current tax structure on imported vehicles favours used cars over new cars. Asked about the situation, U Aung Thet Lwin said high taxes on vehicle importers are not only the case in one country, with Singapore and Thailand also maintaining taxes on imports.

The firm is also starting a local trade-in program, where Mercedes owners can sell their older cars back to the company for a significant discount on a new vehicle. The used vehicles are then sold at the company’s Pre-owned Showroom. So far about 15 Mercedes owners have used the program.

Broader economic factors have also affected the market. The strength of the US dollar against the kyat has led some to postpone their automobile purchases, among other factors.

U Aung Thet Lwin said developing the market for new cars will take another three or four years. “We can’t give up, and we still hope there is a strong new car market,” he said.

Source: Myanmar Times

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