Myanmar's automotive industry has undergone a transformative shift in recent years, attracting global players eager to tap into the nation's burgeoning market. European automakers Volkswagen and PSA Peugeot Citroen have made strategic entries into Myanmar through collaborations with local companies, aiming to compete with established Japanese and American rivals.
European Giants Forge Alliances in Myanmar
Volkswagen and PSA Peugeot Citroen have set their sights on Myanmar's market, partnering with local firms Yoma Strategic Holdings and Super Seven Stars Motors Industry. These alliances signify a concerted effort to secure a substantial share of the new car market in a country once known as the "heaven for used cars."
Volkswagen's Ambitious Plans with Yoma Strategic Holdings
Volkswagen's collaboration with Yoma Strategic Holdings, signed in February, is expected to propel the German automaker to the forefront of Myanmar's new car market among European competitors. VW's Southeast Asian head, Axel Oberdiek, expressed optimism during the signing ceremony, foreseeing substantial growth through the partnership.
PSA Peugeot Citroen Joins the Race
In parallel, PSA Peugeot Citroen entered Myanmar by teaming up with Super Seven Stars Motors Industry, the country's leading car sales network. This move demonstrates the French automaker's commitment to establishing a solid presence in Myanmar, leveraging the extensive reach of its local partner.
Myanmar's Evolving Automotive Policies
The new car market in Myanmar has experienced a relatively recent evolution. Until 2012, the import of used cars was the norm, and new vehicle imports were prohibited until 2013. Key reforms in 2011 marked the country's transition from military rule, prompting the entry of major players like Toyota, Mitsubishi, and Mazda. Subsequent policy changes in 2015 allowed joint ventures between foreign and local companies, further fueling the growth of the automotive sector.
Local Players Rise - Yoma and Super Seven Stars Motors Industry
Two emerging local businesses, Yoma and Super Seven Stars Motors Industry, have rapidly established strong networks for foreign carmakers. While U.S. automakers have been cautious due to sanctions, these companies are making headway in Myanmar's automotive landscape, with Super Seven Stars Motors Industry already having experience as a sales agent for Kia Motors.
The Dominance of Used Cars and the Shift Towards New Vehicles
Despite the prevalence of used cars, the new car market in Myanmar is in its infancy, with estimates suggesting only around 4,000 new units are sold annually. However, with the new civilian government set to take power, potential changes in business dynamics may open avenues for companies focusing on new vehicles.
Opportunities in Myanmar's Automotive Future
While Myanmar's per capita GDP currently falls below the threshold for a surge in passenger car sales, a growing middle class is showing interest in new cars as status symbols. Economic growth and rising incomes are critical factors that could propel Myanmar's automotive market on a trajectory similar to Vietnam, where a decade ago, income levels were comparable to Myanmar's today.
Conclusion
As Myanmar's automotive industry navigates a transformative period, global players are positioning themselves to capitalise on the nation's promising future. With strategic partnerships, policy reforms, and a shifting economic landscape, Myanmar's journey into the world of new vehicles is on the horizon.
