Volvo builds foundations for growth in Myanmar

As Myanmar’s economy opens up, international car brands are increasingly looking to the country’s potential as a promising market.

Among the brands leading the way is the famous brand Volvo.

Volvo entered the Myanmar market in February 2017 and signed up Performance Auto International Co Ltd (Volvo Myanmar) as the importer and distributor of the brands vehicles.

Performance Auto International is a joint venture between the UMG Co Ltd conglomerate and Wai family Co Ltd.

Since its entry into the market just last year, the company has already sold 54 of its vehicles and made its presence felt with the launch of the Volvo XC 40 small premium SUV last May.

The company’s larger XC 90 model was also named Myanmar’s car of the year for 2017.

However, since that promising start, the brand has come up against some headwinds this year.

Uncertainty over the implementation of the Yangon Vehicle Quota Certificate (YVQC) system, which gives people the right to apply for a licence to import and own a vehicle in Yangon for a fixed period, is keeping car buyers on the sidelines.

The Yangon Region government had announced that the system was to be implemented this month, although it has yet to be put in place as of today.

Volvo Myanmar hopes its sales will double once the new system is in place.

“Customers are holding off on their purchases. As of now, sales of all makes of vehicles have dropped by as much as 12 percent,” said Volvo Car Myanmar general manager Mr Temmy Wiradjaja.

The total number of European cars is growing in Myanmar but at a slower pace compared with 2015, 2016, and 2017, figures from the Authorized Automobile Dealer Association show, he added.

As a whole, the number of new European vehicles in the country has been rising since the government changed the vehicle import policy in 2013 to allow people to buy new European vehicles rather than only used cars from Japan.

Once the regulatory uncertainty is sorted out, the Swedish brand is poised to tap growing demand for car in Myanmar, thanks to the manufacturing facility it set up in Chengdu, China, in 2013.

The factory is the brand’s first complete facility outside of Europe.

Located in the Chengdu Economic and Technological Development Zone south East of Chengdu’s city centre, the plant manufactures 120,000 units a year for export around the world.

Employing 3800 workers and 407 robots, the facility has the capacity to churn out 50 vehicles an hour. Among the models assembled in the factory is the XC 60, winner of the World Car of the Year 2018 award.

Mr Xiao Liming, deputy general manager of Volvo’s Chengdu plant, said the factory produces vehicles the exact same quality as the Volvo cars currently produced in Sweden.

“The only difference in the cars is the location where they are assembled. We have the exact standards for our suppliers, whether they are from China or Europe,” said Ms Anette Andersson, Volvo’s regional business Strategy and network development director for Asia.

“Volvo currently has a 20 percent share of luxury car market in Myanmar. Last year, it sold 90 units in Myanmar and this year, Volvo Myanmar hopes to sell 100 units,” said Daw Nway Nway Hlaing, director and CFO of Volvo Car Myanmar.

As part of its efforts to develop the brand’s standing in the country Volvo Car Myanmar hosted a group of local journalists during a trip to visit the company’s plant in Chengdu.

SOURCE: MYANMAR TIMES

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