New Import Regs Send Car Prices Rocketing

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Car prices are set to rise, industry observers say, in the case of some popular models by as much as 100 percent. The increase, they say, is a consequence of the decisions taken by the government regarding the models to be imported in the coming year.

On November 30, the Ministry of Commerce announced the range of years and models of vehicles whose importation would be permitted as of next January 1. As had been widely forecasted, the import of older and right-hand drive vehicles, which are not suited to right-hand traffic Myanmar, will be increasingly restricted. Only cars built since 2015 with left-hand drive can be imported.

Car dealers say the double restriction will push up prices on eligible vehicles, and has already sent prices rising on popular models that will only remain eligible for the remainder of this year.

The rush to import vehicles from Japan before the end of December has more than doubled the yen-denominated import price, said U Min Min Maung, director of the Wun Yan Kha car sales centre. The price of those vehicles once they reach the Myanmar market, meanwhile, has risen even further.

“The price of similar vehicles in Myanmar has leapt from leapt from K1.3 million to K3 million within one or two days,” he said.

He said all cars would be affected by similar increases.

Ko Aung Naing Htun, managing director of the Sakura Auto Auction Centre, said, “Only left-hand drive vehicles manufactured since 2015 will be imported in the coming year. That could cause some difficulties.”

Because those cars will be more expensive, Ko Aung Naing Htun expects a knock-on effect where motorists selling their current vehicle ask for K2 or K3 million more in order to cover the higher cost of a pricy new model.

Cars registered with the Road Transport Administration Department for personal use will be particularly in demand, observers say.

U Aung Than Win, chair of the Automobile Trading Association, said, “Cars already registered with RTAD will rise in value more than others. If the current owner of such a vehicle wants to buy a new one, he will ask more for it.”

U Min Min Maung said people who owned a car for personal use only should not sell – the government has made it difficult for people to import new cars, particularly those in Yangon. The price of vehicles in the local market is also likely to rise. But anyone who intended to buy a used car already in Yangon should do so now, he added, recommending models dating back to 2005 to 2008, including Honda CRV, Toyota RAV4 and Toyota Kluger.

U Min Min Maung said the price was likely to increase to between K30 and K40 million in the coming year. “Check the market before you buy” he said. “But in the case of most types of car, people should buy now. The price of popular 1300cc cars will increase from K10.3 or K10.4 million to K25to K26 million.”

But he predicted buyers would refuse to accept anything more than a K5 million jump in prices.

Other dealers said that people on the lookout for a car with a cost, insurance and freight price of US$30,000 to $60,000 should bide their time and wait out market fluctuations.

After the wave of imports before the January 1 cut-off, the market will settle down and dealers will start to assess their stock. In the aftermath, a few models will start to drop in price, dealers predict.

Up to 10pc of such vehicles could well be sold off for K4 to K10 million below the original price as centre owners unload their stock after the early months of 2017, they said.

 

Source: The Myanmar Times

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