80 pc of automobile purchases related to installment system

About 80 per cent of all automobile purchases in the local market are linked to the installment system, said Dr Soe Tun, President of Myanmar Automobile Manufacturers and Distributors Association.

The number of people who buy automobiles under the financing and hire purchase system of banks has increased. The number of those buying automobiles with hard cash is relatively low, he added.

Until July this year, 8,341 brand new cars were sold, up 119.3 per cent compared with the same period last year. This is the highest rate of sales in the ASEAN countries, according to a report released by ASEAN Automotive Federation.

Until July this year, the number of brand new cars sold out in Indonesia was 661,139, 571,064 in Thailand, 358,179 in Malaysia, 199,628 in the Philippines, 147,125 in Vietnam, 550,099 in Singapore and 6,641 in Brunei. Automobile sales in Singapore, Brunei and the Philippines declined this year.

In 2017, the number of brand new cars sold out in Myanmar was 8,225, up over 97 per cent compared with the figures in 2016. The brand new cars sold out in Myanmar are 891 in January, 1,079 in February, 1,962 in March, 3,715 in April, 1,538 in May, 1,588 in June, 1,500 in July.

In 2016, 4168 brand new cars were sold out. Myanmar becomes an emerging market for the sale and manufacturing of brand new cars. The annual growth rate is expected to become high.

“The brand new car market is booming. There is a shortage of Japan-made cars as the government has banned the imports of right-hand-drive cars. People’s interest has changed as people can buy vehicles worth Ks20 and Ks40 million”, said Dr Soe Tun.

“People’s buying trend has changed. On the other hand, the financing of banks has become strong. Now the installment period has increased from one or two years to five years. Even AYA bank offers seven-year installment plan. But unlike other countries, the interest rate is high. Now the interest rate is more than 10 per cent,” he continued.

In the long-term, higher interest rate causes a heavy burden to those who buy cars via an installment plan.

SOURCE:ELEVEN MYANMAR

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