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    Automotive

    Myanmar

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Overview

The automotive market in Myanmar has grown significantly since import liberalization in 2012 following decades of strict control over military rule

All local automotive production in Myanmar is Semi-Knocked-Down (SKD) assembly, and takes up less than 10% of new annual sales. The rest are Complete Built Up (CBU) imports. The local car production is monopolized by the government. The Ministry of Industry (MOI) operates 3 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 2008 to 2012 – about half of which were built during the last 4 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 Star Motor Company, whose production was controlled and reduced to very small scale (<100 per month) after 2011 by the government. Suzuki, a former Joint Venture (JV) with the government between 1998-2008, produced 4,800 vehicles back then. However, Suzuki’s investment permit was cancelled in 2008 by the government and hence the production stopped. In May 2013, Suzuki announced to resume its car production under its 100% owned entity, with a target of around 1,000 units per year, making it the very first foreign-owned producer in the local market.

Myanmar’s Automotive Sector

Myanmar’s Automotive Sector

Source: MIDC, Solidiance interview, Ministry of Transport

3,739,807

Myanmar Automotive Consulting

units in total registered till Apr 2013


313,582

Myanmar Automotive Consulting

passenger cars in total registered till Apr 2013


76,363

Myanmar Automotive Consulting

commercial vehicles registered till Apr 2013

Myanmar Automotive Overall sales breakdown

Myanmar’s Automotive Sector
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  • “During the course of the process, I found Solidiance highly 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 hands dirty in the marketplace with me. This approach enabled me to understand critical consumer insights behind data. I found it very valuable experience. Thank you very much.”

    Global Insights Manager

    Boehringer Ingelheim
    Toyota Motor Corporation, Japan
Registered Vehicles

Motorcycles remain to be the most prefered vehicle for Myanmar’s population

Both in 2008 and in 2012, the number of total registered vehicles grew substantially, as the number of registered motorcycles increased by over 100% (2008) and 60% (2012). The expansion was seen in every province, owing to introduction of new motorcycle models and increased farm income, and most importantly, encouraged by Myanmar authority’s temporary permission of registering unlicensed motorcycles in circulation into legal fold in both years and 5% extremely 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. Equally, 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, starting Jan 1, 2010. The above rule on permission for car import has again been changed since July 2012. All Burmese citizens are now allowed to import cars, provided the car models are those made after 2007.

All Registered Vehicles in Myanmar (‘000)

Myanmar Hospital Overview

Government strictly controlled car imports and only seaman, embassy staff and students who studied abroad were allowed to import.

Old car owners are allowed to import newer model cars starting from 1999 model in exchange for old car.

Government allows import of passenger cars starting from 2007 model.

Government removed import restriction on commercial vehicles.

Only cars of 2013 model or above would be allowed to import starting from 2015-2016.

Source: Ministry of Transport, Department of Road Transport Administration, Solidiance Interviews and Analysis
Note: * Others includes buses, three wheelers, trawlergyi and heavy machinery

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  • “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 approach in specific segments of the market and to keep us abreast of competitive developments that might otherwise adversely impact our progress. I highly recommend Solidiance and their talented Team.”

    Managing Director Asia Pacific

    Allison Transmission
    Allison Transmission
Registered Vehicles

Due to limited affordability, majority of the population still relies on motorcycles even after car imports were allowed

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

Registered Vehicles by State/Region, June 2016

Source: Ministry of Transport, Solidiance Interviews and Analysis

Registered Vehicles by Type, June 2016

 

Myanmar Automotive Consulting

Motorcycle

Myanmar Automotive Consulting

Passenger Car


Myanmar Automotive Consulting

Trucks

Myanmar Automotive Consulting

Trawler Gyi


Myanmar Automotive Consulting

Others

Registered Vehicles

The growth in the number of registered passenger cars has been driven by regulatory changes, though numbers remain small

 

Overall CAGR for passenger cars was approximately 10% from 2010 to 2015 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 new car license. Commercial vehicles grew at a CAGR of ~27% over the same period.

Registered Passenger Cars in Myanmar

Registered Passenger Cars in Myanmar

Source: Ministry of Transport, Central Statistics Organisation, Solidiance Interviews and Analysis

 

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  • “From my repeat experience, Solidiance's delivery is always above our high-expectations. And I have to say that it is always very exciting to work with the Solidiance team.”

    Global OEM Team Leader

    Allergan
    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 new segments

Myanmar Car Sales by Country of Origin, 2014

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

Myanmar Car Sales by Brand, 2014

Source: Road Transfer Administration Department (under Ministry of Transportation)

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  • “Solidiance's in-depth local knowledge, understanding of our objectives and backed by professional approach 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

    Covidien
    Petronas Lubricants
Car Imports

Car imports in Myanmar have decreased in recent years due to strict regulation as well as strong growth in new car sales activity

According to Myanmar Port Authority, total number of cars imported from FY 2011-2012 until FY 2016 is more than 670,000 numbers on board of 700 ships. However, with car imports directly contributing to congestion in Yangon in recent years, the government has tightened its control over car imports and maintained high taxes based on engine size.

In 2015, the government announced that ‘parking 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 appears to be little consistency in the rules and in May 2016, the new government stopped issuing these permits all together, effectively stalling all used car imports.

Estimated Split of New/Used Car Imports (2015)

Estimated Split of New/Used Car Imports (2015)

 

Number of Imported Used Car

Number of Imported Used Car

Source: Myanmar Port Authority, Solidiance Interviews and Analysis

Slider Background
  • “During the course of the process, I found Solidiance highly 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 hands dirty in the marketplace with me. This approach enabled me to understand critical consumer insights behind data. I found it very valuable experience. Thank you very much.”

    Global Insights Manager

    Boehringer Ingelheim
    Toyota Motor Corporation, Japan
About

About Solidiance

Solidiance is a corporate strategy advisory firm advising CEOs on make-or-break deals and defining market-specific business models for Fortune 500 companies and Asian conglomerates looking to leverage Myanmar's unprecedented growth. Our Myanmar experience includes market entry and growth strategy projects across the automotive industry.

Our full-time in house team of local Myanmar consultants has extensive experience and expertise in advising clients across the passenger cars, commercial vehicles, automotive aftermarket, automotive and commercial lubricants segments, equipped with the most up to date market insights and an extensive network of relevant automotive sector contacts on the ground. Recent projects include Myanmar market entry strategy and distribution partner search for lubricants across passenger cars, motorcycles and commercial vehicles for a Fortune 500 energy firm and developing a 5 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 flexible 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 info@solidiance.com

About

Myanmar automotive Consulting Team

Damien Duhamel

Damien Duhamel

Managing Partner Asia Pacific

 

Damien Duhamel is the co-Founder & Managing Partner of Solidiance and has worked on hundreds of growth strategy engagements with Fortune 500 clients. Based in ASEAN for the last 22 years, Damien is a recognized Innovation and Asia Competitive Strategy expert. His thought leadership has been featured on various media: AFP, Business Insider, BBC, Bloomberg, CNN, CNBC, New York Times, Wall Street Journal, and several Asian publications.  Damien speaks English, French, and Vietnamese.  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

MICKAEL FEIGE

Partner

 

Mickael Feige is a Partner based in Thailand and responsible for Bangkok and Yangon offices. He manages large projects for Fortune 500 in various sectors with a strong focus 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 1 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 between Lyon Political Science Institute and Senshu University. He holds an MBA from INSEAD.

 

Naithy Cyriac

Naithy Cyriac

MANAGER

 

Naithy is a Manager based in Solidiance's Yangon office with over 6 years of advisory experience for Fortune 500 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 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

JACK FOWLER

CONSULTANT

 

Jack is a consultant based in our Myanmar office. His corporate strategy advisory experience in the Myanmar automotive sector ranges from automotive parts wholesale strategy development for the leading OEM brand to market entry strategy for a Fortune 500 automotive lubricant provider. Before joining Solidiance, Jack worked with an international research firm 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

SHIN THANT

CONSULTANT

 

Shin Thant is a Consultant based in our Myanmar office in Yangon, offering strategic support for market analysis, entry and expansion to Fortune 500 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

RAJAN

ANALYST

 

Rajan is an Analyst based in Solidiance's Myanmar office, supporting Fortune 500 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 partner 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 partners 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

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 experience 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.

 

Office

Solidiance Myanmar Office

Suite 602, 6th Floor, Danathiha Tower
#790 Bogyoke Aung San Road
Lanmadaw Township, Yangon, Myanmar
Ph: +95 979 700 6465
Email: Solidiance
Web: www.solidiance.com

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Contact Us

 

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Ph: +62 21 7918 0330

Lebanon

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Building, Aazarieh Street
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Ph: +961 1 987899

Malaysia

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Ph: +60 320221400

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Ph: +66 2 611 2664

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Ph: +971 (0) 24420420

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Ph: +84 835218639

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