Myanmar market seen offering bright prospects
China's Chery Auto is in talks to produce taxis in country where cars are a preferred asset
Myanmar may offer a huge opportunity for mainland carmakers seeking to tap into the growing demand for vehicles in one of the poorest countries in Asia.
Chery Automobile is talking to Myanmar's state-owned industry company to produce its QQ taxis in the country, where the market is dominated by Japanese used cars.
Cars and real estate are the most preferred assets in Myanmar.
A second-hand Honda seven-seater produced in 2001 with 118,000 kilometres in mileage is priced at US$27,000 in a showroom in Yangon, at least 10 times more than that in Hong Kong.
A high tax rate on imported cars also contributes to the high price. Officials said the all-in tax for vehicles of 1,300cc or below was 165 per cent. For larger vehicles, the duty and tax will be more than 200 per cent. The tax has been reduced from 300 per cent.
The state-owned No1 Heavy Industries Enterprise two years ago started to import parts and components from Chery and assemble QQ taxis in Yangon.
The QQ, priced at 7.5 million kyat (HK$65,300), is about one-third the price of a Japanese secondhand car as it is exempted from import tax.