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Boom in commercial vehicles seen in Myanmar
Publication Date : 13-09-2012
Research and consulting firm Frost & Sullivan sees growth potential in Myanmar's commercial-vehicle segment due to the country's many infrastructure projects and booming mining industry after the easing of sanctions by the West.
Masaki Honda, the company's principal consultant for automotive and transportation practice, Asia-Pacific, said overall sales of heavy commercial vehicles in Myanmar were expected to see a compound annual growth rate of 21 per cent from 2011 to 2016 to reach 12,700 units in 2016.
Registrations of trucks - both locally manufactured and imported - could increase to 10,100 units by 2016 from 4,000 units currently. "The growth is due to infrastructure projects and the mining sector, which both use dump trucks and other heavy-duty machinery," he said.
About 700 buses were newly registered in 2011 and the number is predicted to reach 2,600 annually by 2016, thanks to the increase of passenger movements both within Myanmar and with neighbouring countries.
"Myanmar is an attractive destination for commercial-vehicle manufacturers looking to enter the country," he added. However, the consultant said the main challenge for foreign auto manufacturers was the affordability of their vehicles.
"Local companies may not be able to purchase brand-new commercial vehicles, especially Japanese- or European-made ones, and [many] will resort to used vehicles," he said. Moreover, foreign firms will probably be cautious about making any large investment in the country because of the frequent regulatory changes, he added.
Most of the trucks currently used in Myanmar are Japanese imports such as the Nissan Diesel and Mitsubishi Fuso.
"Japanese-made used vehicles are popular even though they are older, such as 2004 models, because of their durability and reliability, while newer Korean and Chinese brands are preferred because of lower price tags than Japanese brands," he said.
Myanmar had about 2.3 million registered vehicles as of last year, including passenger cars, motorcycles and commercial vehicles. Motorcycles are the most popular mode of transport, accounting for 81 per cent of all registered vehicles. Passenger cars have a 12-per-cent market share, followed by commercial vehicles at 3 per cent and buses 1 per cent.
Importers play an important role in bringing used vehicles into Myanmar because of a lack of local manufacturing in the sector, he said.
Before 2010, vehicle imports were restricted |to companies such as an entity owned by the military, which runs multiple businesses such as manufacturing, trading and transport.
However, private companies have since been allowed to import vehicles, resulting in more brands and types of commercial vehicles.