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Toyota to build first Myanmar assembly plant in Thilawa

Japan’s Toyota Group will start building an assembly plant in Thilawa Special Economic Zone (SEZ) this year, according to a Myanmar Times source.

Toyota Motor Corp, the automobile branch of Toyota, will invest several billion yen for the facility to manufacture pick-up trucks through semi-knockdown (SKD) production for the Myanmar market.

An official announcement will be made at the end of the month, another source told this paper.

The multinational automaker currently exports about 2000 passenger and commercial vehicles to Myanmar per year. It has decided to build a new plant in Myanmar because it expects the country will have strong economic growth going forward, Kyodo reported.

The development comes shortly after a recent government announcement which prioritises left-hand drive vehicles for road safety purposes. Control measures on imports of used right-hand drive vehicles, the majority of which are made by Toyota, will also be implemented.

Incentives will be given to manufacturers with local assembly and production plants. Buyers of locally assembled SKD cars are eligible for a Yangon licence, which is expected to allow holders to legally park in the city when new regulations are enforced in the future.

Over the longer term, the country will also aim to build up its auto-parts manufacturing industries, as the bulk of these parts are now imported.

Demand for new cars has already been rising after import restrictions on used vehicles were first tightened in 2016 to reduce traffic congestion. Although new car sales amounted to just slightly more than 17,000 units last year, this was double the number in 2017, according to Automotive Association of Myanmar.

In 2017, sales increased to 1800 units across all three Toyota dealers in the country and the number rose to 3017 in 2018, the data showed.

Japanese automaker Suzuki already has two factories assembling compact cars. Its new Ertiga, which was launched in April and assembled locally, is now the most popular Suzuki vehicle among buyers, state media reported.

The other Japanese car maker with an assembly plant in the country is Nissan.

In February, South Korea’s Hyundai Motor launched a new plant and its first SKD model, the Accent Sedan, in Myanmar. Its competitor Kia Motors also has a plant in the country, as does Ford of the US.

The Myanmar Times has contacted Toyota Motor for comments.

Source: Myanmar Times

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