Tue 13 May 2014
Filed under: Business / Trade,News
The government will not consider any more changes to its car import policy, Minister for Commerce U Win Myint has promised, in a move that industry sources say is likely to boost sales by stabilising prices.
Changes to car import rules since late 2011 have removed thousands of clapped-out cars from the roads, made newer vehicles more affordable and prompted dramatic growth in sales centres, including those selling new cars from international manufacturers. More than 300,000 new vehicles have been imported since the changes were launched, the majority to Yangon.
But U Win Myint said at the opening of the Mercedes-Benz showroom on May 8 that the frequent policy changes are now a thing of the past.
“In the past, car prices were very expensive and it was hard to get a permit to import a car. During my time as minister, the government has … changed the car import policy eight times. We will never change the import policy again, even if there is a change in minister,” U Win Myint said.
Vehicles that were valued at US$100,000 just a few years ago today fetch barely a quarter of that figure and this has enabled many to upgrade or become car owners for the first time. However, policy changes have been controversial because of their dramatic impact on prices. Many dealers have been left with stock that is worth far less than what they paid to import it, while thousands of cars have even abandoned at Yangon port because the taxes owed are higher than their sale price.
Because of their impact, new policies were always a closely guarded secret – which encouraged buyers to hold out in the hope that rumoured changes would materialise and reduce prices further.
Dealers said the minister’s announcement would encourage more sales.
“This announcement is good news. It can stabilise the market and consumers can buy cars without any worries,” said U Soe Htun from Farmer Auto.
Broker U Aung Than Win said that the changes would give a further boost to a market already benefitting from reductions in commercial and registration tax that came into effect on April 1.
“Consumers are more interested to buy cars and the market has come to life again,” he said. “This has pushed [auction] prices in Japan up a little bit but if the government stays true to its words and the policy remains stable then the car market will be quite good in future.”
But Ko Khant Win from ASE Auto said he was less convinced. While overall a positive move, he said it means that the government will retain some elements of the current import policy that need to be rectified.
“Frankly,” he added, “I never believe anything the government says about its policy anyway.”