More buyers expected to opt for new left-hand-drive cars

Since the government’s new car import policy permitting only imports of left-hand-drive vehicles into Myanmar from 2018, speculation over the value of existing right-hand-drive cars in the country has risen, prompting rumours of higher prices for such vehicles.

While prices have indeed risen, car dealers said consumers ultimately base their purchasing decisions on the car manufacturer.

“Consumers like Japanese local-made cars regardless of whether it is right or left-hand-drive. So, if we can’t buy Japanese right-hand-drive cars next year, we will have to import left-hand-drive cars instead. As such, prices for right-hand-drive cars should stabilise soon,” said U Min Min Maung, managing director of Wun Yan Kha, a car sales center.

Since the new policy was announced last month, the prices of some second-hand Japanese right-hand-drive cars have risen to be on par with the price of new cars. For example, a Toyota Prado is now worth K80 million in the second-hand market, which is an increase of 33 percent from before. In comparison, the price of a brand new Toyota Fortuner is around K95 million-K100 million

“But I think the price for right-hand-drive models will not stay high over the longer term, as second-hand cars are, after all, less valuable than brand new cars with zero mileage,” U Min Min Maung said. If the difference between a second hand car and a new car is just K5 million-K10 million, consumers will choose to buy a new left-hand-drive car.

Rising competition

In the meantime, competition in the local car market is expected to intensify as car dealers continue to import second-hand right-hand-drive cars up until existing permits expire at the end of the year. These vehicles will compete with existing second-hand-drive cars, new left-hand-drive cars as well as second-hand left-hand-drive cars.

This will benefit consumers who will now enjoy more options at more attractive prices. “Consumers will go for the option that suits them best,” one car broker said.

Some dealers and brokers believe that demand for second-hand right-hand-drive cars should rise in the short term as buyers scramble to make a quick purchase due to concerns that prices will continue to rise. In Myanmar, the majority of existing right-hand-drive cars is made by Toyota, which is well-regarded for quality and reliability.

New car demand

But U Aung Naing Htun, director of Sakura car center, said: “While many of customers believe only Japanese cars are of good quality, experienced drivers will buy brand new cars especially now that prices of second hand cars are as high as new cars.”

What’s more, by opting to buy new cars, drivers can enjoy warranties and free service for the first three years compared to second-hand-cars. “Even though the second-hand cars are Japanese cars which are in demand, many buyers will go for the brand new cars,” he said.

Over the longer term, the shift towards new left-hand-drive cars is expected to alleviate chronic traffic congestion in cities like Yangon and raise safety standards on the road. As the country’s roads are right-hand-drive roads, only left-hand-drive cars and buses are suitable to be driven. Currently, about 95 percent of the cars on the road are imported second-hand, and most are right-hand-drive vehicles.

“If the cars are assembled in our country and the price is reasonable, nobody will import second-hand cars from other countries, which is the practice now. Myanmar people should try to drive brand new cars and avoid the used car market,” said U Min Min Maung.

Source: Myanmar Times

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