Delay in new automotive policy for Yangon alarms business groups

Two major business groups penned a letter to the commerce and transport ministries to complain about the delay in implementing the new vehicle registration system in Yangon. Vehicle distributors and dealers have been waiting for two years for a new policy. The new system was originally expected to be in place by the beginning of April but the authorities have caused a delay without providing a timeline.

The automotive advocacy group of European Chamber of Commerce in Myanmar (EuroCham) and automotive committee of American Chamber of Commerce Myanmar (AmCham) voiced their apprehension over the delay in implementing the new registration system in Yangon, known as Yangon Vehicle Quota Certificate (YVQC). They further argued that the lack of information on the timing creates ambiguity and confusion in the market.

Two letters, co-signed by the chiefs of the two chambers, were sent to the commerce minister U Than Myint and transport minister U Thant Sin Maung on May 4, copying the Yangon regional government and regional parliament.

The letters, seen by The Myanmar Times, said that the two chambers “express our concerns” about the delay in YVQC and argued that the proposal, which was initially scheduled to be carried out by early April, “has been postponed and, as at today, we have no later update on proposed timing.” The current delay poses a “significant impact on sales since Yangon is the largest market in the country for our respective vehicles.”

The two business groups stated that they increasingly see “an alarming trend among our customers to defer purchasing a new vehicle” until the enforcement or to opt for brands which are not affected by the reform. They requested an update on the proposed timing for implementation of the proposal, and public announcement and activation of the draft as it was presented in March “at the earliest possible timing”.

Two years of waiting

AmCham told The Myanmar Times that vehicle distributors and dealers have waited two years for a viable solution since Yangon City Development Committee (YCDC) stopped issuing registration permits for Yangon buyers of CBU (Completely Built Up) vehicles. The solution needs to support the replacement of used cars with safe and fuel-efficient new left-driving cars.

“Yangon is the largest new car market in Myanmar, and the inability to register new CBU cars has significantly impacted the sales opportunities for new car importers, many of whom have invested in new sales and service dealerships for the Yangon market.

“Without a clear solution and timeline for allowing Yangon registrations, new car distributors will not have confidence to make further investments; and Yangon buyers are not able to replace their old vehicles with safe, fuel efficient and the latest model left-hand drive cars,” the group explained.

Carlo Chiozzi, EuroCham’s automotive advocacy group officer, said that the importance of having an effective new system in place which reduces traffic and pollutions, remains the foremost priority.

“The draft of the YVQC, as presented in March 2018, seems to have the power to successfully tackle such issues, as well as to bring significant improvements in terms of infrastructure,” he stated.

The current system is flawed and hence a new set of regulations is needed.

“The limits of such system … are well known, for example, traffic and pollutions, and they have led to numerous negative externalities, affecting citizens living in Yangon and surrounding area.”

Mr Chiozzi added that the “policy uncertainty” poses a significant impact in the medium-long term on the sales as well as investments.

“Recently, widespread and unofficial rumours about possible changes in regulation are leading to defer the purchasing of new vehicles. The impact in the medium-long term might be remarkable, also in terms of investments,” the officer observed.

Sooner than later

AmCham said new car dealers would like to see the YVQC implemented “as soon as possible” and hope that new CBU registrations can re-commence in June 2018.

No formal responses have been provided by the government to date, according to AmCham, but “dealers understand a new policy is being reviewed in Nay Pyi Taw, and dealers are looking forward to good news in the near future.”

“We have already received several calls, this is definitely a good sign that EuroCham Automotive Advocacy Group highly appreciates,” Mr Chiozzi noted.

Responding to questions from The Myanmar Times, the spokesperson from the Ministry of Commerce said that the implementation of YVQC is within the purview of the Yangon regional government. The ministry itself can only “help or support” the related authorities in charge.

The spokesperson added that the issue is not under the direct authority of the transport and communications ministry either.

In April 2016, the government suspended individual car importing under the Yangon license owing to issues with parking in Yangon, while imports using licenses from other states and regions were permitted to continue. The policies were implemented to reduce traffic congestion and alleviate car-park shortages in Yangon. However, many importers found ways to bypass those regulations, such as registering with fake documents and addresses, which did little to improve overall traffic conditions.

In October 2017, the Supervisory Committee for Motor Vehicles Importing released a set of new rules stating that only left-hand-drive vehicles manufactured between 2014 and 2018 can be imported into the country starting from this year.

Source: Myanmar Times

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