Frost & Sullivan Forecasts Myanmar's Automotive Market To Grow at CAGR of 7.8 Per Cent to Reach 95,300 Units in 2019
HONG KONG, Sept. 3, 2013 /PRNewswire/ -- Myanmar's automotive market is likely to grow at a compound annual growth rate (CAGR) of 7.8 per cent (2013-2019), driven by a growing economy, infrastructure development and increasing income.
Mr. Dushyant Sinha, Associate Director, Automotive Practice, Asia Pacific at Frost & Sullivan said that real growth is likely to start only after 2014.
New analysis from Frost & Sullivan (http://www.automotive.frost.com) CEO 360 Degree Perspective of the Automotive Market in Myanmar finds that the market, currently dominated by used vehicles, is likely to grow at a compound annual growth rate (CAGR) of 7.8 per cent (2012-2019) to reach 95,300 units in 2019 due to greater integration with the rest of ASEAN.
"However, factors such as unpredictable regulatory changes, high car prices, under-developed auto service market and inadequate road infrastructure might hinder the potential growth," he added.
He noted that after decades of military control and closed door policies, Myanmar has gradually opened up its economy to foreign trade and investment.
He added that significant developments were witnessed in 2012, particularly the endorsement of the long anticipated foreign investment law. Besides, the banking, finance and insurance sectors have also undergone various reforms as a part of the government's efforts to improve business environment.
Dushyant said that a young labor force with a high two-wheeler ownership promises a potential car buying group in the long term.
He added that Myanmar is highly dependent on two-wheelers, accounting for more than 80 per cent of the market while passenger cars represent 11 per cent. Meanwhile, trucks and buses only make up 3 per cent and 1 per cent respectively.
Dushyant also said that most parts and components are imported from China and Thailand for assembly activities, as the few locally-produced parts available have very low added value. He added that completely knocked-down (CKD) parts used for assembly requires a license for import, which expires after every 3 months.
He added that only new parts are allowed to be imported into Myanmar. He noted that there is no restriction on imports of new parts based on the Control of Imports and Exports Act. "Despite the import ban for used parts, they are smuggled into Myanmar because genuine parts are highly priced and scarcely available," he added.
Dushyant said that Japanese brands are expected to continue dominating the passenger vehicle market even in 2019, with Honda, Suzuki and Nissan gaining popularity thanks to their small car offerings (such as Honda Fit/Brio, Suzuki Swift, and Nissan March) which would appeal to Myanmar customers.
He added that Chinese and Korean brands will also see growth due to their more affordable prices and smaller engine sizes compared to their Japanese counterparts.
However, U.S. and European presence will remain at minimum level since after sale service support, especially spare parts, are still very limited, Dushyant said.
He said that some of the challenges faced by the Myanmar's automotive market include an underdeveloped aftermarket sector, inadequate road infrastructure and unpredictable regulatory changes.
If you are interested in more information on this study, please send an e-mail to Alice Chia, Corporate Communications - Asia Pacific, at [email protected], with your full name, company name, title, telephone number, company e-mail address, company website, city, state and country.
CEO 360 Degree Perspective of the Automotive Market in Myanmar is part of the Automotive & Transportation Growth Partnership Services program, which also includes research in the following markets: Strategic Analysis of ASEAN Automotive Outlook, 2020 Vision of the Australian Automotive Aftermarket, CEO 360 Degree Perspective of the Automotive Industry in Myanmar, Strategic Growth Opportunities from AEC Implementation and New Government Policies in ASEAN, Strategic Growth Opportunities of Navigation Systems Market in ASEAN, Analysis of the Advanced Driver Assistance Systems Market in Japan amongst others. All research services included in subscriptions provide detailed market opportunities and industry trends that have been evaluated following extensive interviews with market participants.
CEO 360 Degree Perspective of the Automotive Market in Myanmar
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Corporate Communications – Asia Pacific
Email: [email protected]
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SOURCE Frost & Sullivan
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