According to latest research from Frost & Sullivan, Myanmar’s commercial vehicle segment is about to experience potential growth due to the many infrastructure projects and booming mining industry after the easing of sanctions imposed by Western markets against the country.
Total heavy commercial vehicle sales in Myanmar are expected to grow at a compound annual growth rate (CAGR) of 21 percent between 2011 and 2016 to reach 12,700 units in 2016. “The registrations of trucks, including locally-manufactured as well as imported ones, may increase from 4,000 units currently to 10,100 units by 2016,” says Frost & Sullivan Principal Consultant Automotive & Transportation Practice Asia Pacific, Masaki Honda. “This growth is due to infrastructure projects and the mining sector which use dump trucks and other heavy-duty machineries.”
As for buses, approximately 700 buses were newly registered in 2011 and the total number of buses will reach 2,600 units by 2016 thanks to the increase of passenger movements within the country as well as between neighboring countries.
“Myanmar is an attractive destination for commercial vehicle manufacturers looking to enter the country,” Honda added. “However, the main challenge for foreign vehicle manufacturers is the affordability of their vehicles. Local companies may not be able to purchase brand-new commercial vehicles especially Japanese or European-made and will resort to second-hand vehicles.” Foreign firms will therefore probably be cautious about making any large investment due to the frequent regulatory changes.
Most of the trucks currently used in Myanmar are imported from Japan, such as Nissan Diesel and Mitsubishi Fuso. “Second-hand vehicles of Japanese origin are popular even though they are older models, for example from 2004, because of their durability and reliability, while newer Korean and Chinese brands are preferred because of lower price tags compared to Japanese brands,” Honda continued.
As of 2011 Myanmar has about 2.3 million registered vehicles, which include passenger cars, motorcycles and commercial vehicles. The motorcycle is the most popular mode of transport though and accounts for 81 percent of total registered vehicles. Meanwhile, passenger cars have a 12 percent market share, followed by commercial vehicles at 3 percent and buses at 1 percent.
Vehicle importers play an important role in bringing in second-hand vehicles into Myanmar due to a lack of locally manufactured vehicles in the country. Before 2009, vehicle import had been restricted to limited companies such as a company owned by the Myanmar military, running multiple businesses such as manufacturing, trading and transportation. Since 2010, however, private companies have been allowed to import vehicles, resulting in more brands and types of commercial vehicles made available in the country.
“Korean and Chinese brands have been gaining market share since then and are expected to increase further due to their lower pricing as compared to Japanese second-hand vehicles,” Honda concluded.
If you would like to receive further information on the Automotive market in Myanmar or Asia Pacific in general, please send an e-mail with your full contact details to Katja Feick, Corporate Communications, at [email protected].
So there you are – a business opportunity worth investigation.
