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Thura Swiss Research Thura Swiss Ltd.Economic ResearchShwe
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11 Qtr. Hlaing Tsp.
Yangon, Myanmar
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This is a publicaon of Thura Swiss Research. Thura Swiss
research is non-parsan and expresses no other views than those of
its author(s). These views
may be subject to change in the future without any obligaon on
the part of Thura Swiss to reect these changes in the current
publicaon. The informaon
contained in this publicaon has been obtained from public
sources and Thura Swiss is not responsible for its accuracy. The
informaon in the publicaon
does not constute provision of investment advice.
May 10, 2012
CARS (Myanmar version)The market for cars in Myanmar is far from
being simple, being subject to complex
and ght imporng rules. The laer require an import permit to be
obtained before
one can buy a car abroad which signicantly limits the supply of
cars and drives pric-
es up given the fact that the number of cars produced in Myanmar
is limited. Anoth-
er hurdle is that not everyone can get an import permit. This is
probably related to
the sll exisng prohibion for Myanmar people to hold foreign
currency except for
exporters and legal labor migrants.
However, the third quarter of 2011 saw some relaxaon of the
import permits policy
with the government launching a program of old car substuon. The
program basi-
cally meant that owners of cars that were produced 20 to 40
years ago could get
permits to import newer models (manufactured aer 1995) if they
surrendered their
old cars. The program has helped drive the value of the dollar
up against the kyat, a
posive moment for exporters and employees of foreign companies
who saw the
kyat appreciang since March 2010 and their dollar -denominated
earnings plummet.
The substuon scheme was also designed in a way as to keep the
dollar at a more
or less constant value (around 800 Kyat per dollar) throughout
the rst quarter of
2012 and unl the unicaon of kyats ocial and unocial exchange
rates. Thus, 40
-year old cars were to be exchanged for permits from September
19 to October
2011, 30-to 40
-year old car were to be exchanged for permits from November
to
December 2011 while 20- to 30 -year old cars were to be
exchanged from January to
March 2012.
The program also allowed legal labor migrants and sailors to
apply for discounted-
priced import permits. While a normal import permit costs about
$18,200, permit
for sailors and overseas workers costs $8,495.
Myanmar in fgures
GDP (PPP)- $82.72bn (2011)
GDP (ocial ex.rate) - $50.2bn
(2011)
Populaon58.4m people
(2009)
Inaon8.9% (2011)
Foreign trade$16.1bn
(FY2011/2012 est.)
FDI- $40.42bn (2011)
Facts about motor vehicles in Myanmar: According to World Bank
Data, there
were about 7 motor vehicles (cars, buses and large freight
vehicles) per 1,000
people in Myanmar in 2009. According to our calculaons, there
are 75 motor
vehicles per 1,000 people in Yangon.
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Thura Swiss Research 10.05.2012
This is a publicaon of Thura Swiss Research. Thura Swiss
research is non-parsan and expresses no other views than those of
its author(s). These views may
be subject to change in the future without any obligaon on the
part of Thura Swiss to reect these changes in the current
publicaon. The informaon
contained in this publicaon has been obtained from public
sources and Thura Swiss is not responsible for its accuracy. The
informaon in the publicaon
does not constute provision of investment advice.
The relaxaon of import permits under the overage car substuon
scheme have led to an increased acvity on the car
market and to the decrease in prices for cars. By November 2011,
prices for cars fell by 70% y-o-y.
Chart 1. Prices of popular car models, mln kyats
Source: Myanmar Times, November 2011
The increased acvity on the car market has allowed new showrooms
to open in Yangon. There are currently about 11
showrooms in Yangon although the Hantharwaddy market probably
remains the biggest car trading zone in Yangon.
100% foreign owned car dealers are not yet allowed to operate;
however, the government may soon allow foreign au-
tomobile companies from China, Japan, Thailand and South Korea
to set up showrooms in Myanmar in the near future
(Source: Irrawaddy, September 2011). It already issued licenses
to 67 used car sales centers as of May 2012. The centers
are mostly located in Yangon, Nay Pyi Daw and Mandalay.
The government has already lied the need to apply for import
permits in relaon to cars produced in 2007 and aer. In
this way the government of Myanmar is untangling its complex
system of import restricons in order to allow for a more
open economy.
Steps towards imporng a car in Myanmar
Apply for import permit Open a bank account worth at least
$5,000 Import a car Pay
import tax including road tax, commercial tax and customs duty
(the total comes up to 165% of the origi-
nal car value)
