Sri Lanka’s loss, Myanmar’s gain
Diesel and Motor Engineering PLC (DIMO), hard on the heels of second hand car market dealers setting up business in Myanmar, is also considering venturing into the former Burmese nation to trade in vehicles.
The country is attracting second hand and new car dealers alike from Sri Lanka, which is grappling with a sales crisis.
Ranjith Pandithage, Chairman and Managing Director DIMO told the Business Times that the company is considering business options in Myanmar and other East Asian countries along with their principals to combat the downturn in vehicle sales in Sri Lanka. “All the levies have risen here causing a huge downturn in new vehicle sales. So with our principals we might try going to Myanmar and countries like that.”
He said that it makes business sense as that country is seeing economic growth with an increasing demand for automobiles especially after new economic reforms.
High taxes and the reduced age of the vehicles are among issues that the car import industry is facing in Sri Lanka. The car market sales has slumped with the (second-hand) Vehicle Importers Association of Sri Lanka saying sales were only around 100 units per month compared to 3,500 some years back.
Earlier this month, a delegation from the association visited the former military-controlled capital of Naypyidaw, which has seen significant economic and political reforms. After the September 10-16 visit, the association last week announced that it was setting up a company and showrooms there. Firms such as Associated Motorways Ltd (AMW) are also interested in establishing businesses in Myanmar. “Right now we’re evaluating this option,” Samantha Rajapaksa, Managing Director AMW told the Business Times.
Myanmar is undergoing massive economic reforms and US and European businesses are increasingly going into the former rigid military state. The US is close to lifting economic sanctions. Three weeks back, a 19-member delegation from the National Chamber of Commerce of Sri Lanka visited Myanmar to look at business opportunities.
This week that country’s President Thein Sein of Myanmar announced a second wave of reforms, just after 15 months in power and the release of political prisoner and Nobel Laureate Aung San Suu Kyi. Cars as old as 1996 (year of manufacture) are being permitted to be imported by Myanmar authorities. In Sri Lanka, second hand cars older than two years cannot be imported. Vehicle Importers Association Secretary Keerthi Gunawardene told the Business Times, two weeks back, that Myanmar was offering favourable tax benefits and other facilities given for importers.
He revealed that among the popular models – Toyota Mark II, Mitsubishi Pajero and Hilux Surf were flooding the Myanmar market. Other cars popular were Corolla Spacio, Corolla Fielder, Land Cruiser, Hiace Saloon, Crown Majesta, Nissan’s Sarena, Truck, condor, Mitsubishi’s Pajero, Chariot and Fuso.
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