business | investment
Ford is First to Enter Myanmar’s Growing, Volatile Car Market One of the world’s largest automakers hopes to make strides in a market long dominated by a military conglomerate’s used-car imports By PAUL VRIEZE
Y
ANGON — When Ford Motor Company announced at the end of April that it would open an official dealership in Yangon this year, it became the first international car-maker to distribute new vehicles on the Myanmar market, which until recently remained closed off due to international sanctions. Ford executives said Myanmar’s auto market, although still small, holds great promise for future sales of Ford passenger cars, SUVs and transport vehicles. Official import figures show that the country’s car sales have grown rapidly since 2011, perhaps by more than 50 percent. According to analysts and local car dealers, however, demand is volatile
and most consumers prefer secondhand japanese vehicles. They say that it remains to be seen how strong demand for the more expensive new Ford cars will be. Ford executives said Myanmar offered a new Asian growth market located in an economically vibrant region. “Ford is aggressively expanding its operations in Asia Pacific and Asean. And we saw a great opportunity to expand here in Myanmar,” said Dave Westerman, Asia Pacific regional manager at Ford export and Growth Operations. “Ford Motor Company will become the first global automaker to provide automotive solutions in Myanmar,” he said at a press conference at Yangon’s Inya
Lake hotel on April 30. Capital Automotive Group has been contracted to open a Ford facility, comprising a showroom, service center and spare parts warehouse, on Yangon’s Insein road in hlaing Township by the end of this year. The group is a joint venture between Bangkok-based rMA Group and Capital Diamond Star Group, a conglomerate owned by Myanmar businessman U Ko Ko Gyi. The facility will employ 40 people who will be trained in sales and servicing of Ford cars, said Martyn Dawson of Capital Automotive, adding that sales prices have not yet been set as the firm was still conducting market research. Mr Westerman said he was confident that brand-new Ford vehicles would be in demand among Myanmar customers, although he stopped short of giving an estimate of how many vehicles Ford could sell here. he added that it was too early to consider investment in car manufacturing and assembling in Myanmar. “A lot of cars on the roads here are 10, 20 years old, and have no customer warranty, no service,” Mr Westerman said, while Ford would offer “a highquality product and service, and gain a high level of customer satisfaction—this is a critical component of what we bring to Myanmar.” Ford is among a group of American companies, including Ge, PepsiCo, Coca-Cola and Google, which have announced plans to enter Myanmar after the US government suspended economic sanctions against the country last year following its transition from a military regime to the current quasicivilian government. “We took a lead off the American government and their call for American businesses to invest here in Myanmar. Continued on p.44
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TheIrrawaddy
June 2013