Yangon: Myanmar’s military regime has launched a crackdown against owners of an estimated 30,000 smuggled luxury cars as part of its power struggle against the former allies of ex-premier General Khin Nyunt.

The junta has started to impound all “unlicenced” motor vehicles signalling an end to a lucrative cross-border racket worth millions of dollars believed to involve members of the regime’s once powerful military intelligence faction.

Analysts believe more than 30,000 luxury cars and 4x4s found their way into the country from Thailand and China and past border security posts manned by intelligence officials.

The group, which had wide-ranging powers, was headed by Khin Nyunt until he was sacked for corruption by the head of the junta Senior General Than Shwe on October 19.

The military, which has run the country since 1962, has since swiftly moved against the widespread business interests of intelligence officers, who represented a rival faction in the leadership.

It includes a crackdown on the smuggling and sale of unregistered cars that can be bought and sold at prices less than a fifth of the going price of legally registered ones.

Half of them ended up in the ancient city of Mandalay, 500 miles north of the capital Yangon where 15,000 smuggled cars replaced registered ones, according to a long-time Mandalay resident.

In the city a nearly new four-wheel drive Toyota can change hands for 8.5 million kyat (8,950 US dollars according to unofficial street rates), less than the cheapest car in the capital.

“Over the last four years Mandalay came to be known as the ‘City of Without(s)’ the resident told AFP, explaining that ‘without’ was car dealer jargon for unlicenced vehicles.

“Nowhere else can you own a luxurious late model car at the price of a cheap car in Yangon,” he said.

But a surprise police crackdown on unregistered vehicles at midnight on October 31 had changed all that, he said.

“We were given a week to surrender all un-licenced vehicles under the threat of stiff jail-terms,” a hotel manager, who also buys and sells cars, from the area told AFP.

According to him, some owners caught with more than one unregistered vehicle dismantled the cars piece by piece leaving just an empty shell to be seized.

Others sold them off to opportunistic spare-part dealers who picked up the cars at rock-bottom prices to be resold as spares.

One of the earliest victims of the crackdown was a business partner of Dr. Ye Naing Win, the son of deposed premier Khin Nyunt, who ran a lubricant shop in the ancient city, the man said.

“Not only were six of his late model 4x4s confiscated but he has been arrested for his well-known connection to Ye Naing Win,” he added.

“Other owners, unwilling to give up their vehicles, simply drove them inside the nearest Buddhist monastry hoping to retrieve them later when the dust had settled.”

The government this week urged owners to surrender their cars as quickly as possible, and said those that handed them over would not be prosecuted, an official spokesman said.

“As the Government will not take action or interrogate any owners of un-licenced cars, the best and the most appropriate way is to officially hand over the illegal cars to the nearest police station,” police director-general Brigadier Khin Yi said Tuesday.

Meanwhile, Yangon’s car dealers and brokers said the trade in far more expensive registered cars in the capital had picked up dramatically with prices sky-rocketing at least for the moment.

“We’re making a killing and hope this will keep on for some time to come,” a young broker enthused.