Foreign auto investments announced in Myanmar

Japanese car maker Suzuki’s decision to resume vehicle production in Myanmar in May is just one of the changes spurred by the enactment of laws and regulations governing foreign investment on January 31, industry sources say.

Following the opening of its auto spares showroom on Pyay Road on February 2, Nissan is also thought likely to set up an assembly factory in Myanmar.


In addition, according to Directorate of Investment and Company Administration (DICA) website, Jardine Cycle & Carriage of Singapore will cooperate with Automobile Century in Myanmar in providing automobile services in Yangon.

“Suzuki will resume production in Myanmar, and Nissan is likely to come in for manufacturing, but I don’t think any other companies will come,” said senior economist Dr Maung Aung, commenting on the meeting on February 7 between Myanmar officials and the Japanese business lobby Nippon Keidanren.

Mr Masaki Takahara, executive managing director of the Japan External Trade Organisation (JETRO) in Yangon, said Japanese companies were most likely to be involved in labour-intensive light manufacturing industry. “After the development of the Thilawa Special Economic Zone, I think high value-added manufacturing like the automobile industry can participate in manufacturing,” he said.

Labour costs in Myanmar are the lowest in Asia, and labour quality high, he added. Industries that did not need significant electricity supply, such as the garment industry, could also prosper here.

“More and more Japanese offshore software development and programming companies are participating in Myanmar to take advantage of the low-cost, high-skilled labour,” he said.

The lure of an untapped consumer market of 60 million is also attractive to foreign investors despite restrictions in the form of rules and regulations governing investment, he said.

The recent influx of late model second-hand vehicles suggests that the short-term impact of Suzuki’s resumption of production will be low.

“People will surely be interested in new cars, but it will not affect the local market much, I think, because initial production will be only about 100 a month, mostly trucks,” said one commerce official.

source: The Myanmar Times
http://www.mmtimes.com/index.php/business/4150-foreign-auto-investments-announced.html