Toyota sees uphill sales battle in Yangon

Local car dealer Toyota Aye and Sons is hoping a hire purchase scheme will help boost sales of a new Toyota model, which has to compete with a sea of used vehicles in a market complicated by regulations.

Toyota has been struggling to sell brand-new cars in Myanmar despite campaigns and promotions. The market is already awash with used Toyota vehicles and other popular Japanese brands, and few customers are willing to shell out for a new ride.

Aye and Sons is now trying to market the new Toyota Vios – a model produced to be affordable for emerging markets across Asia-Pacific. Toyota’s Myanmar dealer has also partnered with local lender AYA Bank to offer hire purchase in the hope of making the new vehicle even more attractive.

Myanmar customers can start with a down payment of around US$5000 – less than one-third of the full cost – and chip away with $242 a month payments. But Myanmar import policy could still stand in the way of sales. Yangon is easily the biggest market for new cars, and residents have to procure a car parking recommendation letter from the local authorities in order to purchase brand-new imports.

The government has stopped issuing the letters, partly in an attempt to prevent further congestion on Yangon’s already crowded streets.

“For Yangon customers we already know that it will definitely be difficult for them to buy,” said a spokesperson from Toyota Aye and Sons. “We also understand the government’s side, and we have to follow regulations. So we are trying to balance between government regulation and customers.”

Other international car brands operating in Myanmar face the same problem. U Kin Htun, managing director of a Ford showroom, said that when it comes to selling new vehicles he relies on other states and regions because demand in Yangon is so lacklustre as a result of import regulations.

One exception is Suzuki, which has a local production factory.

“We are producing the cars ourselves in Myanmar so the customers don’t need to get a parking recommendation letter from the government,” a Suzuki spokesperson said. “So this problem doesn’t impact our market.”

According to industry association figures, around 150,000 vehicles were imported during 2015 – but only 4000 were brand new. Owners of showrooms like Aye and Sons and U Kin Htun are hoping this number will increase, but say it will take a shift in government policy to make that happen.


Source: Myanmar Times

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