Prices of Used Cars Soar 70% in a Month, Putting Breaks on Demand

The price of used cars has increased by an average of 70 percent from April to May as the market responds to recent changes to the country’s auto policy, ac­cording to industry ex­perts.

The price hike has seen slowing demand for once popular used cars this month as buyers are being priced out of the market, while new cars remain too expensive for most, ac­cording to the Myanmar Automobile Manufactur­ers and Distributors As­sociation.

“Myanmar’s middle class is growing but they can’t afford brand new vehicles from showrooms because they cost mini­mum K40 million, so they buy used vehicles worth under K10 million” U Yan Myo Aung, Secretary of Myanmar Automobile Manufacturers and Dis­tributors Association told Myanmar Business To­day.

The cooling market can be attributed to changes in the government’s au­tomobile policy, part of its efforts to decongest Yangon’s traffic choked streets.

In November last year the government an­nounced that imported cars must be no more than two years old and must be left-hand drive. The ensuing rush on older right-hand vehicles in the month leading up to the ban pushed up prices ofused cars by 20 percent.

Meanwhile, the govern­ment increased the rates on automobiles levies. A 20 percent levy now ap­plies to all imported car engines of up to two litres, and the rate increases up to 50 percent depending on engine size, with those with four litre engines pay­ing the maximum rate.

There could be a silver lining for new car buyers, however, with car show­rooms releasing payment installment plans on new vehicles in a bid to reach sales targets.

“The reason why brand new sales don’t reach the numbers of used cars is the price gap,” said U Aung Than Win, a mem­ber of the Myanmar Au­tomobile Manufacturers and Distributors Associa­tion.

Source: Myanmar Business Today