Local firm plans Daewoo bus factory in Yangon

Myanmar Coach Centre, the local distributor for Daewoo buses, plans to build a factory in Yangon that could start producing coaches and city buses by 2018, its managing director said.

The company, which sells minibuses and coaches for tours, imported 15 Daewoo city buses earlier this year for Yangon’s Bus Rapid Transport (BRT) system, the city’s first public-private-partnership bus line.

It now hopes to expand its operations with a US$10 million factory in Yangon’s Mingaladon township, managing director U Kyaw Kyaw Aung said. His company has applied for a permit from the Ministry of Industry and is ready to start building as soon as permission is granted.

“We are now preparing to build our own buses in Myanmar, through a joint venture with Daewoo. We particularly hope to produce city buses to support public transportation requirements,” he said. “Daewoo will provide the machinery, technical assistance and management, while we will invest in the plant and run the operations.”

Zyle Daewoo Bus Corporation is a South Korean company. It was part of the Daewoo conglomerate until 1999 when the group went bankrupt and sold its motors division to General Motors. Daewoo Bus Corporation, a spin-off, was bought by Korean firm Young-An in 2002.

U Kyaw Kyaw Aung said the factory will take more than one year to build, and should be running by 2018. It would both sell to the local market and export buses overseas, he said.

“Domestic demand is not great. It would not be profitable for some companies to make vehicles here. But Daewoo’s strategy is to build factories in many countries, to sell locally and to export, while limiting the number of models produced in each place, to encourage trade.”

Daewoo Bus has factories in countries including Taiwan, Costa Rica, Vietnam, Shanghai, Kazakhstan and Pakistan, according to its website.

While most vehicles on Myanmar’s roads are imported, Asian automakers have recently started to show an interest in building automobiles locally.

In February, Nissan Motor Corporation said it would begin assembling new cars for the first time in Myanmar this year in partnership with Tan Chong Motor Group, at a factory in Bago Region, while Suzuki Motor Corporation is planning to open a factory in Yangon’s Thilawa township in 2018.

U Kyaw Kyaw Aung said his factory will reduce costs for local buyers. “Customers can buy locally made buses at a very reasonable price and the taxes would be lower, too,” he said.

Myanmar Coach Centre also intends to produce school buses, which could reduce one very specific form of congestion. Parents sceptical of the safety of old school buses prefer to ferry their children to school by car.

“What we have now is a one-child, one-car system, which adds to the traffic,” said U Kyaw Kyaw Aung.

The government has taken initial steps to rein in the number of cars by requiring importers to demonstrate that they have space to park them. But much remains to be done to strengthen public transport systems.

“Yangon traffic jams are caused by private vehicles. The government not only has to crack down on the import of private vehicles but loosen the procedures for importing public transport vehicles,” said U Kyaw Kyaw Aung.

“According to the Road Transport Administration Department, nearly 8000 buses are registered but only 4000 are running, and these are very old. Public transport expansion would be very good for business too, to improve employee timekeeping.”

He also believes the government should publish a long-term plan for the industry.

“The current policy seems to be based on ad-hoc announcements, rather than a thought-through strategy,” he said. “But investors need to plan ahead – we were in discussions with Daewoo for two years over the building of this factory.”

 

Source: The Myanmar Times

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