Toy­ota sees up­hill sales bat­tle in Yan­gon

The Myanmar Times - - Business - AYE NYEIN WIN ayenyein­win@mm­times.com

LO­CAL car dealer Toy­ota Aye and Sons is hop­ing a hire pur­chase scheme will help boost sales of a new Toy­ota model, which has to com­pete with a sea of used ve­hi­cles in a mar­ket com­pli­cated by reg­u­la­tions.

Toy­ota has been strug­gling to sell brand-new cars in Myan­mar de­spite cam­paigns and pro­mo­tions. The mar­ket is al­ready awash with used Toy­ota ve­hi­cles and other pop­u­lar Ja­panese brands, and few cus­tomers are will­ing to shell out for a new ride.

Aye and Sons is now try­ing to mar­ket the new Toy­ota Vios – a model pro­duced to be af­ford­able for emerg­ing mar­kets across Asia-Pa­cific. Toy­ota’s Myan­mar dealer has also part­nered with lo­cal lender AYA Bank to of­fer hire pur­chase in the hope of mak­ing the new ve­hi­cle even more at­trac­tive.

‘It will def­i­nitely be dif­fi­cult for [Yan­gon cus­tomers] to buy.’

Spokesper­son Toy­ota Aye and Sons

Myan­mar cus­tomers can start with a down pay­ment of around US$5000 – less than one-third of the full cost – and chip away with $242 a month pay­ments. But Myan­mar im­port pol­icy could still stand in the way of sales. Yan­gon is eas­ily the big­gest mar­ket for new cars, and res­i­dents have to pro­cure a car park­ing rec­om­men­da­tion let­ter from the lo­cal au­thor­i­ties in or­der to pur­chase brand-new im­ports.

The govern­ment has stopped is­su­ing the let­ters, partly in an at­tempt to pre­vent fur­ther con­ges­tion on Yan­gon’s al­ready crowded streets.

“For Yan­gon cus­tomers we al­ready know that it will def­i­nitely be dif­fi­cult for them to buy,” said a spokesper­son from Toy­ota Aye and Sons. “We also un­der­stand the govern­ment’s side, and we have to fol­low reg­u­la­tions. So we are try­ing to bal­ance be­tween govern­ment reg­u­la­tion and cus­tomers.”

Other in­ter­na­tional car brands op­er­at­ing in Myan­mar face the same prob­lem. U Kin Htun, manag­ing di­rec­tor of a Ford show­room, said that when it comes to sell­ing new ve­hi­cles he re­lies on other states and re­gions be­cause de­mand in Yan­gon is so lack­lus­tre as a re­sult of im­port reg­u­la­tions.

One ex­cep­tion is Suzuki, which has a lo­cal pro­duc­tion fac­tory.

“We are pro­duc­ing the cars our­selves in Myan­mar so the cus­tomers don’t need to get a park­ing rec­om­men­da­tion let­ter from the govern­ment,” a Suzuki spokesper­son said. “So this prob­lem doesn’t im­pact our mar­ket.”

Ac­cord­ing to in­dus­try as­so­ci­a­tion fig­ures, around 150,000 ve­hi­cles were im­ported dur­ing 2015 – but only 4000 were brand new. Owners of show­rooms like Aye and Sons and U Kin Htun are hop­ing this num­ber will in­crease, but say it will take a shift in govern­ment pol­icy to make that hap­pen.

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