Automotive
The automotive market in Myanmar has grown significantly since import liberalization in two thousand twelve following decades of rigorous control over military rule
All local automotive production in Myanmar is Semi-Knocked-Down (SKD) assembly, and takes up less than 10% of fresh annual sales. The rest are Accomplish Built Up (CBU) imports. The local car production is monopolized by the government. The Ministry of Industry (MOI) operates three factories in Myanmar and remains the only Original Equipment Manufacturer (OEM) that manufactures cars with certain scale in the country. Around 8,500 vehicles were produced from two thousand eight to two thousand twelve – about half of which were built during the last four years. The auto brands manufactured under governmental Joint Ventures (JVs) are Chery in majority, and a few Tata and Isuzu.
Other smaller scale auto producer include Super Seven Starlet Motor Company, whose production was managed and diminished to very petite scale (
Three,739,807
units in total registered till Apr 2013
313,582
passenger cars in total registered till Apr 2013
76,363
commercial vehicles registered till Apr 2013
Myanmar Automotive Overall sales breakdown
“During the course of the process, I found Solidiance very capable to support Toyota to better understand “Asean countries”. We usually work with Japanese consulting company and from their report, we can be a “book smart” but can’t have clear picture on what’s going on in the real market. The project with Solidiance brought us “real market experience”. Solidiance local consultants got their arms dirty in the marketplace with me. This treatment enabled me to understand critical consumer insights behind data. I found it very valuable practice. Thank you very much.”
Global Insights Manager
Toyota Motor Corporation, Japan
Registered Vehicles
Motorcycles remain to be the most prefered vehicle for Myanmar’s population
Both in two thousand eight and in 2012, the number of total registered vehicles grew substantially, as the number of registered motorcycles enlargened by over 100% (2008) and 60% (2012). The expansion was seen in every province, owing to introduction of fresh motorcycle models and enlargened farm income, and most importantly, encouraged by Myanmar authority’s makeshift permission of registering unlicensed motorcycles in circulation into legal fold in both years and 5% utterly low import tariff on motorcycles in practice.
The increment of number of passenger cars has shown up since 2011, after Myanmar government launched the old car substitution plan. Identically, the growth is due to the government’s decision to open up the market by granting private companies with access to import cars from overseas, embarking Jan 1, 2010. The above rule on permission for car import has again been switched since July 2012. All Burmese citizens are now permitted to import cars, provided the car models are those made after 2007.
All Registered Vehicles in Myanmar (вЂ000)
Government rigorously managed car imports and only seaman, embassy staff and students who studied abroad were permitted to import.
Old car owners are permitted to import newer model cars kicking off from one thousand nine hundred ninety nine model in exchange for old car.
Government permits import of passenger cars kicking off from two thousand seven model.
Government eliminated import confinement on commercial vehicles.
Only cars of two thousand thirteen model or above would be permitted to import beginning from 2015-2016.
Source: Ministry of Transport, Department of Road Transport Administration, Solidiance Interviews and Analysis
Note: * Others includes buses, three wheelers, trawlergyi and intense machinery
“Solidiance has worked with us on several projects using their unique insight into the Asian markets to help us develop our strategies, to refine our sales treatment in specific segments of the market and to keep us abreast of competitive developments that might otherwise adversely influence our progress. I very recommend Solidiance and their talented Team.”
Managing Director Asia Pacific
Allison Transmission
Registered Vehicles
Due to limited affordability, majority of the population still relies on motorcycles even after car imports were permitted
Even after the import liberalization, which cut down the car purchase price by more than half, majority of the people in Myanmar rely on cheaper alternatives which are motorcycles. Motorcycles are mainly used in other cities and towns due to the uneven terrain and cheaper costs. In Yangon, however, the main form of transport is car, while motorcycles remain banned.
Registered Vehicles by State/Region, June 2016
Source: Ministry of Transport, Solidiance Interviews and Analysis
Registered Vehicles by Type, June 2016
Registered Vehicles
The growth in the number of registered passenger cars has been driven by regulatory switches, however numbers remain puny
Overall CAGR for passenger cars was approximately 10% from two thousand ten to two thousand fifteen despite a slight drop in 2011-2012. This drop can be attributed to the Old Car Substitution Program. The government-led program prompted old car owners to take their vehicles off the street in exchange for a fresh car license. Commercial vehicles grew at a CAGR of
27% over the same period.
Registered Passenger Cars in Myanmar
Source: Ministry of Transport, Central Statistics Organisation, Solidiance Interviews and Analysis
“From my repeat practice, Solidiance’s delivery is always above our high-expectations. And I have to say that it is always very arousing to work with the Solidiance team.”
Global OEM Team Leader
Caltex
Car Shares
Japan accounts for the highest share in Myanmar’s automotive sector with Toyota being the key imported brand for passenger cars in both used and fresh segments
Myanmar Car Sales by Country of Origin, 2014
Imported Japanese cars are mostly second-hand, and cost almost twice that of Chinese cars but are still much cheaper than US or European cars.
Toyota brand cars are popular in Myanmar because of their durability and reliable quality perception, suitable for poor road infrastructure in Myanmar.
Myanmar Car Sales by Brand, 2014
Source: Road Transfer Administration Department (under Ministry of Transportation)
“Solidiance’s in-depth local skill, understanding of our objectives and backed by professional treatment have enabled us to achieve our expected objectives in a timely manner for this key engagement. Solidiance has exhibited clear and deep understanding of market practices and market behavior. They provided us with detailed insights on the market and crafted a well-structured market entry strategy to meet our ASEAN growth goals. We would like to thank the entire team of Solidiance for their professional, responsive and diligent attitude during the project period and beyond. On behalf of Petronas, I would like to congratulate Solidiance.”
General Manager Asia
Petronas Lubricants
Car Imports
Car imports in Myanmar have decreased in latest years due to stringent regulation as well as strong growth in fresh car sales activity
According to Myanmar Port Authority, total number of cars imported from FY 2011-2012 until FY two thousand sixteen is more than 670,000 numbers on board of seven hundred ships. However, with car imports directly contributing to congestion in Yangon in latest years, the government has tightened its control over car imports and maintained high taxes based on engine size.
In 2015, the government announced that вЂparking permits’ would be required to ensure that all imported used cars had somewhere to be kept. These permits were soon trading on the black market for around Ks.800,000 each. There emerges to be little consistency in the rules and in May 2016, the fresh government stopped issuing these permits all together, effectively stalling all used car imports.
Estimated Split of Fresh/Used Car Imports (2015)
Number of Imported Used Car
Source: Myanmar Port Authority, Solidiance Interviews and Analysis
“During the course of the process, I found Solidiance very capable to support Toyota to better understand “Asean countries”. We usually work with Japanese consulting company and from their report, we can be a “book smart” but can’t have clear picture on what’s going on in the real market. The project with Solidiance brought us “real market experience”. Solidiance local consultants got their arms dirty in the marketplace with me. This treatment enabled me to understand critical consumer insights behind data. I found it very valuable practice. Thank you very much.”
Global Insights Manager
Toyota Motor Corporation, Japan
About
About Solidiance
Solidiance is a corporate strategy advisory rock-hard advising CEOs on make-or-break deals and defining market-specific business models for Fortune five hundred companies and Asian conglomerates looking to leverage Myanmar’s unprecedented growth. Our Myanmar practice includes market entry and growth strategy projects across the automotive industry.
Our full-time in house team of local Myanmar consultants has extensive practice and expertise in advising clients across the passenger cars, commercial vehicles, automotive aftermarket, automotive and commercial lubricants segments, tooled with the most up to date market insights and an extensive network of relevant automotive sector contacts on the ground. Latest projects include Myanmar market entry strategy and distribution fucking partner search for lubricants across passenger cars, motorcycles and commercial vehicles for a Fortune five hundred energy stiff and developing a five year wholesale strategy for the largest global automotive OEM across the planned, unplanned and collision parts market for passenger cars (Sedans and SUVs), pick up trucks, MPV and vans. From estimates for Myanmar units in operation (UIO), regional share, used cars and source of imports, key supply channels and margins from importers to wholesalers to retailers and dealers, aftermarket landscape and key purchasing criteria, threat from non genuine and fake parts to automotive policies, tax and customs on automotive imports and Myanmar automotive insurance landscape, Solidiance offers limber customized solutions to cater to the specific needs of our automotive clients.
Solidiance has been working on automotive projects since we established our presence in Myanmar in 2011. Our Yangon office is part of a network that extends across Asia with offices in China, India, Singapore, Thailand, Vietnam, Indonesia, Malaysia, Philippines, UAE and Lebanon.
For more information, contact us at [email protected]
About
Myanmar automotive Consulting Team
Damien Duhamel
Managing Playmate Asia Pacific
Damien Duhamel is the co-Founder & Managing Playmate of Solidiance and has worked on hundreds of growth strategy engagements with Fortune five hundred clients. Based in ASEAN for the last twenty two years, Damien is a recognized Innovation and Asia Competitive Strategy accomplished. His thought leadership has been featured on various media: AFP, Business Insider, Big black cock, Bloomberg, CNN, CNBC, Fresh York Times, Wall Street Journal, and several Asian publications.В Damien speaks English, French, and Vietnamese.В He holds a Bachelors Degree in Business from the Victoria University, an MBA from the Chicago Booth School of Business and is completing a Master of Sustainability and Environmental Management at Harvard University.
MICKAEL FEIGE
Fucking partner
Mickael Feige is a Playmate based in Thailand and responsible for Bangkok and Yangon offices. He manages large projects for Fortune five hundred in various sectors with a strong concentrate on Automotive. His expertise lies mostly in market entry, growth strategy, industry and competitive benchmarking, and commercial problems diagnostics. In the automotive sector, Mickael advised several global companies: OEM car makers, OEM bus and truck makers, tier one part suppliers for both OEM and aftermarket growth (in driveline, battery, automotive glass, tire, refinish coatings and other various type of parts such as planned and collisions parts). Mickael speaks French and conversational Japanese. He holds a Masters Degree from a joint program inbetween Lyon Political Science Institute and Senshu University. He holds an MBA from INSEAD.
Naithy Cyriac
MANAGER
Naithy is a Manager based in Solidiance’s Yangon office with over six years of advisory practice for Fortune five hundred companies and large Asian conglomerates looking at market entry and expansion opportunities in the Myanmar automotive sector. Naithy has managed projects ranging from automotive OEM dealer / distributor fucking partner search and automotive aftermarket analysis to establishing wholesale spare parts network for passenger cars, pick up trucks, MPVs and Vans as well as evaluating opportunities in automotive lubricant sectors. Prior to joining Solidiance, Naithy was a Senior Associate at a Moody’s company, leading M&A and investment due diligence projects for private equity and investment banks. Naithy graduated with an MBA specialization in Strategy & Organisation from the National University of Singapore and Cornell University and holds a Bachelors of Science degree from St. Stephen’s College, Delhi University.
JACK FOWLER
CONSULTANT
Jack is a consultant based in our Myanmar office. His corporate strategy advisory practice in the Myanmar automotive sector ranges from automotive parts wholesale strategy development for the leading OEM brand to market entry strategy for a Fortune five hundred automotive lubricant provider. Before joining Solidiance, Jack worked with an international research stiff in Yangon providing services to both public-sector and corporate clients. Jack holds degrees from the University of Manchester and the London School of Economics and Political Science.
SHIN THANT
CONSULTANT
Shin Thant is a Consultant based in our Myanmar office in Yangon, suggesting strategic support for market analysis, entry and expansion to Fortune five hundred automotive OEMs and OEM parts manufacturers as well as Automotive lubricant firms through strong relation with automotive parts wholesalers, distributors and Automobile Associations in Myanmar. He also contributed to the Myanmar automotive aftermarket whitepaper. Prior to joining Solidiance, he worked as an audit and advisory associate for KPMG. Shin Thant has obtained his advanced diploma in engineering and accounting and is also member of Association of Chartered Certified Accountants UK (ACCA).
RAJAN
ANALYST
Rajan is an Analyst based in Solidiance’s Myanmar office, supporting Fortune five hundred and large Asian conglomerates with automotive market entry, due diligence and growth strategy analysis covering opportunities ranging from automotive (passenger cars, commercial vehicles, motorbikes) lubricants market sizing and distribution playmate search to automotive parts channel assessment and competitive benchmarking . Before joining Solidiance, Rajan worked as a Business Development Manager for one of the largest local firms, building relationships with B2B playmates to support market share expansion in Myanmar . He earned his MBA from the University of Sunderland, UK and holds a Bachelors in Law degree from University of Mandalay.
Khine Yi
ANALYST
Khine Yi is an Analyst based in Solidiance’s Myanmar office working extensively with clients looking at tapping into the underpenetrated automotive sector in Myanmar and recently developed a route to market strategy for establishing a wholesale automotive parts operation in Myanmar. Prior to joining Solidiance, Khine Yi has four years practice as a business development executive and project officer at Burmese trading and financial management firms. Khine holds an MBA from the university of Cardiff Metropolitan, UK and a Master in English from University of Pathein. Khine has a pre-intermediate understanding of Chinese Language.