#1 Used cars account for ~95% of the market

Following the changes in car import regulation, there has been a sharp increase in car ownership in Myanmar. Yet, the private passenger vehicle penetration rate in the country is still very low, at less than 10 per 1,000. One specificity of the Myanmar market is the very high proportion of used private cars – less than 5% of sales were new passenger cars in 2014. This is mainly the results of the buyers’ limited spending power but also the reliability of long lasting high mileage Japanese cars. The new passenger car market has grown very rapidly over the last three years, albeit from a very low base.

#2 Toyota has ~65% market share

The majority of the passenger cars are imported from Japan and Toyota is by far dominating the market, with a 65% market share in 2014. The reliability, affordability and availability of spare parts are among the main reasons why Myanmar drivers like Toyota. The Toyota “Probox, the Honda “Fit” and the Nissan “AD” are among the most popular models. Estate is the most popular body type and right-hand drive cars still dominate despite the fact that Myanmar is a right-hand traffic country since 1970.

#3 15 foreign automotive makers have showroom in Myanmar

Myanmar’s automobile market presents a unique opportunity in that it is a high risk – high reward market which can be seen by the influx of foreign auto brands. In Yangon, there are 15 new vehicle showrooms from foreign car brands such as BMW, Chevrolet, Ford, Hyundai, Kia, Mercedes, Nissan, Suzuki, and Toyota. Some brands have shifted their focus from Yangon by opening new showrooms in Mandalay, Mawlamyine, and Taunggyi. In particular, Ford, Mercedes, and Chevrolet have already opened up or plan to open a showroom in Mandalay. The lack of stable policies that favor new cars, complicated procedures such as the Proof of Parking Permit Policy, high tariff rates, and consumer preference for used cars are obstacles for new car showrooms. Because of these difficulties and despite the huge opportunity that exists in the automobile market in Myanmar, recent press reports have suggested that a couple of those new car showrooms could be closing by the end of 2015.

#4 Myanmar to facilitate the Establishment of Automobile Manufacturing Facilities

Most of the vehicles in Myanmar are imported and, in order to create jobs and retain foreign exchange reserves, the government of Myanmar is currently working on improving the legal framework to allow foreign automakers to establish assembly plants in the country. Domestic automobile assembly plants have not been successful in the past due to the lack of foreign expertise and lack of technology which consequently lead to low production quality. The only international brand that has managed to make significant headways in Myanmar is Suzuki – the Japanese car maker has an assembly plant that produces the popular Carry model and is planning to open a second factory. Nissan is expected to follow suit and commence production of the Nissan Sunny at their Bago facility in late 2015.  In addition of developing a better legal framework and tax incentives for foreign investors in the automotive industry, the government is also investing in the development of modern infrastructure and industrial zones across the country.

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