Industry signs agreement on helping to boost automotive sector

The European Chamber of Commerce Myanmar (EuroCham) and local industry organisation Automotive Association Myanmar (AAM) have signed an agreement to cooperate on efforts to advocate for a stronger automotive industry in Myanmar.

The agreement signed by EuroCham’s Automotive Advocacy Group and AAM last week is expected to work on suggestions for the government to help boost the country’s automotive sector. The signing ceremony also provided a platform to discuss the recent publication of the World’s Bank Ease of Doing Business Index and how it relates to Myanmar’s automotive sector.

The main topics discussed at the event were the delays in the implementation of the Yangon Vehicle Quota Certificate (YVQC) system and the plight of vehicle importers.

“The current delays in implementing the YVQ, after multiple announcement about it this year, is worsening the conditions of business in Yangon, the biggest sales hub for the automotive sector. New investors refrain from entering the market, while current investors have a difficult task of explaining to their head offices how they have been welcomed to import and sell new vehicles in Yangon, but these vehicles cannot be registered in the city once they are sold,” said Carlo Chiozzi, EuroCham automotive advocacy officer.

“Moreover, because of the current taxation system, the government is losing a large amount of revenue that could boost funding for better road infrastructure and public transport by not allowing imported vehicles to be registered in Yangon,” Mr Chiozzi added.

“The government has already allowed the opening of car showrooms in the country and many investors have done so. The point of opening showrooms in Yangon, which costs a lot of money to do, is to sell cars in Yangon. However, the current regulatory landscape is hampering the sale of cars, and this shouldn’t be so,” said U Aung Win, chair of the Automotive Association of Myanmar. At present the government is encouraging global car companies to set up plants in the country to assemble their vehicles, rather than importing them fully assembled.

“The government offers incentives for local assembly and this makes cars assembled in Myanmar more affordable. However, this is undone by uncertainty over regulations to register the vehicles as it keeps people from making a buying decision. This in turn hampers growth in an industry that offers potential for the country,” said U Aung Win.

“We welcome the cooperation between EuroCham and representatives of the local automotive industry as we share a vision of building the industry in Myanmar,” said Timmy Wiradjaja, general manager of Volvo Myanmar.

Global car brands such as Nissan, Suzuki, Ford, and KIA have already set up plants in Myanmar to assemble vehicles for sale in the local market.

Source: Myanmar Times

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