Myanmar: New policy aims to raise number of new cars on the road
The Ministry of Industry launched a new automotive policy this month, with the aim of supporting transport and auto-related business through sustainable development and more foreign direct investments.
Under the new policy, the usage of left-hand drive vehicles will be promoted for road safety purposes. Control measures on imports of used right-hand drive vehicles, which now dominate the market, will also be implemented.
Meanwhile, tax incentives will be given to car makers with local assembly and production plants that meet international standards. Over the longer term, the country will aim to build up its auto-parts manufacturing industries to serve overseas markets.
This is expected to help increase the usage of new left-hand drive vehicles in the economy by 4 percent, or 200,000 new vehicles, in the first five years and to 400,000 vehicles in next five. Over the longer term, the ministry is targeting a total of 1.2 million new vehicles.
The number of vehicles used in Myanmar has spiked since the authorities liberalised vehicle imports in 2012. Now, automakers estimate that the number of vehicles used in Myanmar will exceed two million in 2020, more than doubling from 721,324 in 2016, or 15 units per 1000 people. More than half the number of vehicles is in Yangon. In 2011, there were only 365,000 vehicles on the road, according to official data.
However, the ratio of new car sales to the total number of vehicles on the road is now just less than 1pc.
As such, the new policy is expected to drive further growth in domestic automotive manufacturing and auto-related businesses along the supply chain, such as machinery and parts manufacturing, supply of raw materials, after-sales services, parts distribution and insurance and financing services providers. It will also generate many employment opportunities, Daw Yi Yi Kyaw, general manager of No.1 Heavy Industrial Enterprise under the Ministry of Industry, told the Myanmar Times.
U Zaw Htike Aye, secretary of Myanma Automobile Manufacturers and Distribution Association, welcomed the move, saying the country needs an automotive policy for regulated growth.