Thursday, September 21, 2017

Car import rules too restrictive for some

Tighter government restrictions on imports, shortage of space and, just maybe, a cooling-off in Yangon’s love affair with the motor vehicle has led to the closure of several car showrooms.

Potential buyers look for a deal at a car brokers’ compound in Yangon.StaffPotential buyers look for a deal at a car brokers’ compound in Yangon.Staff

About 20 sales centres have applied to close their doors this month, the Ministry of Commerce has announced.

The Yangon Supervisory Committee for Motor Vehicles has imposed rules designed to reduce vehicle imports with the aim of cutting the number of cars displayed in sales centres by the end of the year.

One such measure was an attempt to keep dealers out of crowded downtown Yangon by decreeing that showrooms and sales centres must have a compound not less than 2000 square feet in extent. After complaints that such spaces were rare throughout the city that was reduced to 1400 sq ft for showrooms and 9000 sq ft for sales centres. Rules were also introduced to govern the location of warehouses.

For existing sales centres, the committee drew up rules governing the systematic display of vehicles, the regular production of timely debit and credit statements, including the transfer of money to countries of origin amounting to 80 percent of sales, systematic deposits and timely reporting of income to the tax authorities.

The stricter environment is proving too much for some sales centre owners.

Ko Aung Naing Htun, director of Sakura Auto Auction centre in South Okkalapa township, said some were closing to avoid the difficult procedures.

“I think some centres wanted to close to avoid sending unsold cars back that they had bought under the consignment system. I’ve had to do that, and it’s difficult.”

U Min Min Maung, managing director of Wun Yan Kha centre in Hlaing township, said the problem was the numbers involved and the space limitations.

“The car trade was already down in Yangon. It isn’t so easy to find enough space for a sales centre or showroom any more. And the quota of car numbers per centre is being reduced every month, so profits don’t exceed investments.”

In some cases, even centres which had been issued with permits never opened.

“I think sales centres that followed the rules are not closing. Some didn’t follow the rules, and never sold any cars,” said U Min Min Maung. Since 2011 there has been 481,349 private vehicles - excluding trucks and motorcycles - imported to Myanmar, according to Road Transport Administration Department.