Commerce ministry losing patience with car centre closures

Defunct Yangon car sales centres are causing headaches for the Ministry of Commerce. Businesses are failing to formally report closures, leaving the ministry with an out-of-date registry on which two-thirds of listed sales centres no longer exist.

‘’Among some 190 Yangon sale centers 66 have closed but are still included on the Ministry of Commerce’s registration list,” said U Myint Cho, a ministry official. “Although they are not operating, they did not officially close their centre. We have reminded them many times and we’ll do so strictly once again.”

Another 28 centres on the registry have no defined location, and have not provided any information to the ministry, he added.

The Myanmar government starting allowing car imports in 2011, which led to a profusion of sales centres across Yangon. But a series of shifts in import policy made it difficult for some centres to stay profitable.

Unable to predict market movements in an environment of uncertain policy, they closed down.

Aspiring businesspeople need to deposit US$100,000 at state-owned banks to open a sales centre. They then apply to a government supervisory committee, which checks that the location is suitably located and large enough. Once a registration card is issued, the sales centre can start importing cards under a consignment system.

Under this system, the imported cars are still owned by a foreign-based exporter, but sold by a local broker who then earns a commission on the sale.

Should someone decide to quit the car sales business, they can withdraw their $100,000 deposit. But in order to do so, they need a letter from the Ministry of Commerce to show the Central Bank.

Although this should provide an incentive for departing business owners to let the ministry know, too many are not going through the proper steps. But their negligence is irritating rather than strictly illegal, U Myint Cho said.

“We have submitted this situation to the Supervisory Committee for Vehicle Imports,” he said, but added that although a delay in notifying the ministry violated import-export laws, it could not be classed as a crime.

“We can’t define a deadline [for reporting closure] because it is not crime,” he said.

“We have no laws for this, and so can’t take action. All we can do is submit the situation to the supervisory committee and continue according to its direction.”

Source: Myanmar Times

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