Category Archives: Myanmar (Burma)

Myanmar’s car market faces growing pains

Published in Wards Auto on 11 July 2016

Fewer cars of this vintage are seen on Yangon's roads today
Fewer cars of this vintage are seen on Yangon’s roads today


Myanmar’s potential market for new cars is significant, but growth is hampered by regulatory uncertainty. Although it has a population of 51 million, only 5,000 new passenger cars were sold in the last financial year.

“The future is very good, potentially. But right now it’s a very primitive market,” said Htoo Aung Lin, executive committee member of the Authorised Automobile Distributor Association (AADA), which represents the new car industry.

Car imports were effectively banned under the military regime until September 2011. Half a million cars were imported during the quasi-civilian government’s five year tenure that ended in April this year. The sudden influx of vehicles caused congestion in the commercial capital of Yangon – and a number of arguably misguided policies designed to lessen it.

Parking permit woes

Downtown traffic
Downtown traffic

Yangon’s municipal authority introduced a policy in January 2015 that requires individuals applying for a car import permit to prove they have a parking space.

The policy created a black market in parking permit recommendation letters, which cost approximately MMK700,000 (USD585,000). When Myanmar’s first democratically elected government in 50 years came to power in April, it did so on an anti-corruption platform. It promptly cancelled the issuing of parking permits.

On June 20, the government’s Supervisory Committee for Motor Vehicle Imports announced it would allow certain commercial vehicles to be imported. Passenger cars, however, remain subject to the permit requirement.

The old and the new
The old and the new

“It’s a rough patch we’re going through and businesses are suffering,” said Michael Rudenmark, Managing Director of Automotive at Yoma Strategic Holdings. Singapore-listed local company Yoma is the importer and distributor Volkswagen, Bridgestone tyres and distributor for Mitsubishi.

He predicts sales will be down 20 percent this year and that it’s too early to tell whether the new government will be more business friendly.

Most expressed optimism that it will adopt longer-term policies that are properly enforced.

“I’m sure the new government doesn’t want Myanmar to keep being a dumping ground for used Japanese vehicles,” said AADA’s Htoo Aung Lin.

Left to rust...
Left to rust…

When asked whether the regulation has hampered sales, Mr Eak said: “To a certain extent. Orders are still strong, although some buyers did drop out due to the parking permit issue.”

Dr Soe Tun, president of the Myanmar Automobile Manufacturer and Distributor (MAMD), which acts as a bridge between policy makers and the private sector, said a Japanese policy is ineffective in the context of Myanmar.

“In Japan, authorities will go to a car owner’s house to check the address registered. In Yangon the permits are fake and there’s no public or private parking.”

MAMD submitted 16 proposed solutions to lessen traffic congestion to the government two months ago, but none have been implemented. He said that as many as 80 percent of vehicles are sold in the commercial capital of Yangon.

Right-hand drive on left hand roads

Another challenge is used car imports, the bulk of which are right-hand drive (RHD) Japanese or Korean brands. As a former British colony, cars in Myanmar drove on the left side of the road until 1970, when the superstitious dictator General Ne Win changed the law overnight because his astrologer believed the country had moved too far to the political left.

Hot-rods are a dangerous addition to Yangon's streets
Hot-rods are a dangerous addition to Yangon’s streets

“The biggest challenge for the importers and distributors of new LHD cars and trucks is primarily used car imports. While there have been some moves to curtail [RHD used cars] imports on the basis that they are clearly unsafe and do not meet the legislated left hand drive requirement, progress has been slow,” said Mike Pease, Ford General Manager at Capital Automotive Ltd.

Chevrolet opened one of its largest showrooms in Southeast Asia as a joint venture between Singapore’s Alpine Group and Myanmar’s AA Medical Group in November 2014. According to General Manager Samuel Eaks, the company sold 250 units last year and is number two for new passenger cars, with Mazda placed first and Mercedes, third.

“I wouldn’t say Myanmar’s market is crowded with brands yet, but it’s becoming more so day by day,” said Mr Eaks.

He said that when he came to Myanmar two years ago, the new car market was less than one percent of all registered, whereas data from the Road Transport Administration Department shows it’s grown to three percent.

My husband hailing an (unmarked) taxi
My husband hailing an (unmarked) taxi

However many in the industry complain that the sector is widely over-taxed.

“It seems that the government sees the car industry as an easy target for collecting tax,” said an industry insider who declined to be named.

Tax on commercial vehicles is comparatively lower than on passenger vehicles, which is in part because Myanmar’s economy is driven by agriculture.

“The new car segment is 70:30, with 70 percent being commercial and 30 percent are passenger,” said Yoma’s Mr Rudenmark.

Local manufacturing scope limited

Due to Myanmar’s proximity to major manufacturing hubs such as Thailand, the potential for local assembly is negligible.

“You have countries manufacturing cars next door and free trade [in ASEAN] soon – why would you move all that just to please a very small market?” said Mr Rudenmark.

Around 800 Suzuki vehicles are assembled in Yangon annually and Nissan is currently building an assembly plant in Bago, which is 91 kilometres from Yangon.

Parking in Yangon doesn't usually look so simple...
Parking in Yangon doesn’t usually look so simple…

“… the investment required in local assembly requires a combination of a strong domestic sales base together with supportive government investment policies. At this stage the size of the market for LHD new cars is small which makes the business case challenging,” said Ford’s Mr Pease.

Introducing GPS Guided Travel Articles on my blog

What's that, you ask?
What’s that, you ask?

I’ve just joined an app called GPS My City that allows iPad and iPhone users to download my articles to use while they’re on the go (that is to say – offline).

As it’s a pretty new app, I’ll quickly explain how the concept works…

Imagine reading a useful travel article and wishing you could refer to it whenever you wanted, regardless of whether you had an internet connection at the time.

If you have access to the internet, you could always bookmark the article and return to the website later. But that would require spending money on data. And in Myanmar you’re unlikely to have a cell phone plan as telecoms is still a pretty complex affair for tourists and there aren’t tourist packages on offer as there in Bangkok and most other places.

Also, just reading through the article again will remind you of the places you wanted to visit — that swanky-sounding bar or the regional bus station — but you’d still have to stop and look up the directions to find it.

Luckily there’s now a much better way and it’s called GPS-guided travel articles. These travel articles have GPS coordinates embedded in them and a map of the route as described by the author in the article. And you can find literally thousands of these articles (from over 600 worldwide cities) at GPSmyCity. Once this app is downloaded to your phone (for which you’ll need to pay a fee of around a dollar), you won’t need to use the internet to have the article as a guide. It will show you right where you are on the map and guide you to each subsequent location… Nice eh?

Two of my posts are available on GPS MyCity and the first one listed below is available for free from Monday 25 July through Sunday July 31.

Jessica’s Top Tips for Yangon, Myanmar

Hip in Yangon? Hop to Bahan

Please make sure to first download the GPSmyCity app when clicking the article link. After the GPSmyCity has been launched, the article app will appear by default; then you should click “Upgrade” to upgrade the article.

And another FYI… you can upload any travel article from GPSmyCity at no cost, which means you can read it without needing wi-fi. Should you decide that GPS-guided articles are the way to go, you’ll need to pay a fee of about a dollar. As a participating blogger, I earn a few cents when you download my posts. I hope you’ll agree that’s a good deal for us both 🙂

‘Paddy to plate’ rice report launched

Published in Mizzima Weekly on 1 June 2016

Proximity's Jim Taylor at the launch
Proximity’s Jim Taylor at the launch

Social enterprise Proximity Designs launched a report on 31 May titled ‘Paddy to Plate: the Rice Ecosystem in Myanmar,’ which aims to identify the roles at each stage of paddy production, the factors that drive decision making in the sales chain, and the opportunities and challenges facing a sector that is in a state of flux worldwide.

Creative director and writer Lauren Serota told Mizzima Weekly that the biggest challenge was “the breadth of the topic area and really doing it justice.”

“Rice in Myanmar is such a deep and significant thing. So much of the language is rooted in agricultural metaphors – it was really interesting to learn about the nuances. Our aim was to strike a balance between being thorough and interesting – we wanted to make something that rice nerds and consumers alike would enjoy reading,” she said.

The fact that it has been created by a team of designers and has a large visual component lends it to the category of coffee table book as well as presenting a body of qualitative research in an accessible way, said Proximity Design’s co-founder and Chief Executive Jim Taylor.

“We took a design lens to the rice sector; we wanted to use our research as a foundational study and complement existing macro-economic research,” he said.

Proximity staff with the new report
Proximity staff with the new report

Back in 1999, the International Rice Research Institute (IRRI) found that Myanmar has the highest annual consumption of rice at 211 kilogrammes per person per year. Laos, Cambodia, Vietnam and Bangladesh trail behind Myanmar’s consumption rates, despite being among the world’s top consumers. According to UNDO, rice eaters and growers constitute the bulk of the world’s poor.

When asked by Vicky Bowman of the Myanmar Centre for Responsible Business whether child labour had been found during the research process, Proximity’s project lead and writer Su Mon said that rice harvesting is “back-breaking, even for an adult. I don’t recall seeing any children working.”

“The thing that struck me the most is the interconnectedness of the process. It will take a systemic change from a lot of different players to get to the point where paddy farmers are at a level where they can consistently produce crops,” Ms Serota told Mizzima Weekly.

The launch was held at the Yangon Gallery in People’s Park and included a panel discussion featuring three rice experts, including Dr Duncan Bowden from Michigan State University. He presented a brief comparative analysis of Myanmar’s rice sector.

“There’s an amazing quote in the report… that says that [one of the researchers] didn’t meet a single young farmer who wasn’t frustrated. The future of the rice sector in Myanmar depends on changing that, so that young men and women do see a future for their families. Then rice will have a future.”

“Myanmar doesn’t need to worry too much about the international market – there is a strong demand for rice and competitors are struggling; they are struggling with issues such as climate change and the overuse of soils. But it is essential for Myanmar to make it profitable for farmers, and especially for young farmers.”

The launch was held at Yangon Gallery
The launch was held at Yangon Gallery

Fellow expert Daphne Khin Swe Swe Aye said that the government’s ad hoc policies of the past have held back the sector and contributed to high poverty rates amongst Myanmar’s agriculture workers.

“Suddenly there were no exports for months [following the floods during the last monsoon season] and then you lose the buyers. The government should not introduce ad hoc policies to solve problems in the short-term. There needs to be a longer term approach and more research needs to be done. And the research should be done on what farmers need – such as what types of seed they need – not what a minister likes to do. I hope the new government will do that. It is also very easy to say things, but implementation takes time. Schemes can be announced such as compensating farmers for losing crops, but there is no follow-through. The government should be really careful about announcing things before knowing whether they can be implemented.”

She also said that Myanmar should work towards creating its own unique variety of rice, rather than largely cultivating Chinese hybrids, as the costs of production tends to exceed profit margins.

The report is available for K20,000 from Proximity’s Yangon office – contact via its Facebook page. Or click here to download a free copy: