PHYO WAI KYAW
EW cars used to be rarer than gold in the golden land. After General Ne Win’s government nationalised industries in Burma in 1972 with the aim of creating a self-suﬃcient state, the only way to get a new car imported was through government connections or via exemptions issued to sailors travelling abroad. But neither was there a local auto industry either, so old cars were patched together and kept on the road in whatever ways possible. Some dated to the Second World War or earlier.The situation changed somewhat in the late 1990s. Suzuki partnered with the government to produce Wagon R sedans and Viva 110 motorcycles in Myanmar. Then, in 2000, the Mandalay and Taunggyi industrial zones were given authorisation to produce 50 jeeps themselves per year, and the Monywa and Pakokku industrial zones were authorised to produce 30 each.Local manufacturers say it was the jump-start they’d been waiting for. With a huge vacuum in the car market, they’d seen the possibilities for sales, especially to those who were rich enough to aﬀord cars but not rich enough – or well-connected enough – to bring in foreign models. They’d been yearning for permission to build more cars at home, and at last they had it. It also helped that, in 2001, the government tightened the car import ban – except for those able to snag special licences – thus removing all competition for local producers.Producing an entire vehicle from scratch was beyond the capabilities of Myanmar’s factories, however, so except for the body shell – which give the vehicles a unique visual appearance and set them apart from those made elsewhere – most of the inside parts for the so-called new local cars were purchased internationally and imported. Gear boxes, engines, front and rear axles, steering wheels – 35% of the “local” cars consisted of parts shipped in from outside. And news reports at the time said seized shipments of illegally imported car parts would be sold to local manufacturers at low prices.Since the body was handmade in Myanmar, though, mass production was impossible. Vehicles were sold in advance: You placed an order and, three to four months later – possibly longer, depending on what factory you bought from – your car was ﬁnished. And in the meantime, during the waiting period, you could proudly say, “I ordered a jeep to be produced at the zone.” Because jeeps they were, not sedans or vans. But once a steady ﬂow of production was in place, in 2003 the industrial zone started producing made-to-order light trucks as well, which were suited for industrial use.In retrospect, comparing the cost of a whole vehicle imported from outside the country and the cost of the spare parts needed to build a locally made vehicle, the zone prices were still too expensive. Depending on shape, size and which zone it came from, in the early days of production a Myanmar-made automobile could cost anywhere from K3.5 million to K8-10 million. That’s roughly $3500 to $10,000 at today’s exchange rate – well beyond the average worker’s salary. For producers, though, it was a lucrative industry.In the early years at the Mandalay industrial zone, three or four companies were producing only three to ﬁve vehicles a year. But within ﬁve years, 30 companies were producing thousands of cars annually, with companies like Dagon and Shan Star becoming icons of the road. According to a “sensitive” report issued in March 2008 by the American Embassy and currently hosted online by Wikileaks, in 2007 “more than 400 small and medium-sized companies in Burma produce[d] ‘new’ unbranded jeeps and light trucks with used parts imported from Japan, China, Taiwan, and Malaysia”. The same report states that 150,000 vehicles were made that year, with the military alone buying up to 40 percent of them. The real purpose of at-home manufacturing, the author of the unsigned report suggests, may have been to provide the armed forces with less expensive vehicles than those imported from overseas.But the jeeps weren’t as reliable as those from abroad. And nor were everyone who sold them. Taking parts from non-licensed cars and putting them in a local car; stamping a foreign brand on the body of a Japanese-made Liteace – these were just two of many tricks used by some companies to increase revenue. Still, analysts said at the time that the local car market was proving steady. and advised that imports of spare parts should be done in advance until parts of better quality could be made here. But they also warned that when the time came that foreign-made cars could again be imported, the local car production industry might quickly ﬁnd itself out of business.That’s exactly what happened. In October 2011 the ban on imports was lifted: New cars could again be imported by private citizens with a licence. And licences were no longer rare: A trade-in program was set up, in which 20-to-40-year-old vehicles could be surrendered for scrap in exchange for the right to buy a newer foreign-made vehicle.The policy swept many old and unsafe cars oﬀ the road. But it also swept away the hopes of those in the local manufacturing industry. Without a protectionist import ban in place, their businesses were sunk.“The business has stopped,” says U Myint Swe, from Man Star car factory in Mandalay’s industrial zone. The chance to import more prestigious foreign brands has wiped out the public’s interest in locally assembled cars, he says, and pushed many out of the industry. “Some factory owners changed to opening showrooms of foreign imported cars.”U Ko Ko Oo, who formerly met success with the Okay car brand, is among those would won’t be producing jeeps anymore. They don’t really qualify as new cars anyway, he says.“Jeeps are ﬁxed with the Japanese parts. Although it seems ﬁne parts-wise, because of the cutting and ﬁtting of the body they should be listed as used cars.”Today, zone-made jeeps in good condition still fetch upward of K5 million. They’re meant to last over a decade, as most are used for rough work only, and many owners are looking to trade them in if possible. For those with the money, the tradition of keeping an old car on the road indeﬁnitely seems to be waning. As a character on a recent South Korean soap opera said, “The car we are using is even three years old now, and we should exchange it.” It seems Myanmar drivers are thinking the same way too.
When the government’s car substitution program began in September 2011, allowing people to trade in old cars for a licence to purchase a newer one, it transformed the look of Myanmar’s roads in one punch. But it also wiped out a once-thriving industry of local car production
Local car manufacturers left in the dust
Workers assemble vehicles in Mandalay’s industrial zone in 2007,the golden era of local car production.
Photo: Phyo Wai Kyaw
Current used car prices
Toyota Belta140-145$14,214-$14,7212008 X-Grade130-135$13,198-$13,7062007 G-Grade160$16,2442010 X-GradeToyota Probox120-135$12,183-$13,7062007 F-GradeToyota Vitz105-115$10,660-$11,6762007Honda Fit145$14,7212008 L-Smart155$15,7362011105$10,6602008Toyota Wish240-230$24,366-$23,3512003Toyota Surf (Diesel)340$34,5181999285$28,9341998ToyotaLandCruiser(Diesel)550$55,8381998Suzuki Swift115$116762006-2007160$162442010-20131 lakh = K100,000; US$1 = K985
Hanthawaddy car market as of February 15, 2014
Imported used cars are displayed for sale at a car lot in South Okkalapa township in Yangon.More than two years after the government’s car import system came into effect,about 200,000 vehicles have been imported,most of them destined for the streets of Yangon where they’ve resulted in heavy traffic jams.But with thousands of automobiles still parked in car yards across the city,and several thousand more idling at Thilawa port near Thanlyin,market sources complain that sales have come to almost a complete stop,with car prices remaining relatively unchanged over the past six months.
CARS AWAIT CUSTOMERS