Export companies and hotel and tourism operators with at least US$100,000 in domestic bank accounts, as well as Myanmar workers abroad who have at least US$30,000 in bank accounts here will be able to access permits in coming months, the Ministry of Commerce website states.
A ministry official told The Myanmar Times on December 20 that about 900 export companies and 700 overseas workers had applied for import permits, with about 30 percent already approved.
Soon after the government unveiled the “overage” car import substitution plan in September the price of import permits – obtained when a 40-year-old or older vehicle was submitted to the government for scrapping – hit a high of about K12 million.
But the ministry official said in coming months that permits would no longer be required because car sales centres would be opened, allowing consumers to buy vehicles directly.
In mid-December the Ministry of Industry briefly opened sales centres in Yangon and Mandalay to sell 1000 Chinese-made Chery QQ3 sedans. However, the cars sold out within a week.
The official added that nine service companies, including Sakura Technical Services Company, Diamond Auto Services Company and Sandrar Services Company, would open sales centres in Yangon and Nay Pyi Taw in January.
For the time being they would only be allowed to sell vehicles to people with import permits but in future would be allowed to sell freely, he said.
Under the overage car substitution program buyers were limited to selecting cars made between 1995 and 2002 but the companies and overseas workers with US dollar accounts will be able to bring in brand new vehicles.
About 6700 cars have already been imported under the import substitution program, with about 12,000 older vehicles submitted for substitution.
Ko Aung Naing Htun, the manager of Sakura Technical Services and automobile sales centre, said the price of selected Toyota models in Tokyo used car auctions had skyrocketed on demand from Myanmar since September.
Toyota Mark II sedans, colloquially called shwe ngar or gold fish, increased in price from US$2000 to $7000 for 2001-02 models because they were in such strong demand. Buyers have been circumventing the import substitution plan’s $3500 value cap by paying money to the sellers in Japan through the illegal hundi remittance network, he said.
“An organisation should be set up to monitor the prices paid at auctions in Japan to ensure that people don’t cheat the system,” he said.
U Aung Win, car trader at Yangon Hantharwaddy car trading zone, said import permits acquired by overseas Myanmar workers were only valued at between K2 million and K4 million because the market perception was that the import process was too complicated.
He added that import permits obtained through the car import substitution program had not fallen greatly in value yet because market demand was still strong. But he added that when the next batch of cars, with htasingtoo number plate prefixes, started being submitted for import permits prices would probably fall by about 20 percent because there were about 50,000 of these vehicles on the road, although most were government vehicles.
Ref:https://www.mmtimes.com/business/1586-car-permit-prices-likely-to-tumble.html
Old car, permit prices rising again, say Traders
After months of steady declines, prices for used cars and import permits are on the way back up, car traders said last week.
They say a pause in the government’s overage car import substitution program, coupled with rumours that importers would be able to buy even newer vehicles, have pushed prices upward.
The Ministry for Commerce announced in early May that citizens with foreign currency bank accounts held at state-run banks could import cars made between 2007 and 2010 with engines of 1350 cubic centimetres or less in capacity without a permit. Foreign currency accounts with private banks have since been added to that program, with popular small cars, such as Toyota Vitz, Suzuki Swift and Honda Fit, selling for between K11 million and K20 million.
The earlier car import substation policy, which was unveiled in September, had limited imports to cars made between 1995 and 2006.
However, owners of the many car sales centres that have opened since September asked the government in May to amend the import substitution policy to allow them to import newer vehicles.
U Kyaw Nyunt, a trader at Yangon’s Hantharwaddy car trading zone, said the hottest selling vehicles are those eligible for immediate substitution – pazuat prefix – or the next batch, balachaik, which is widely expected to follow after the window for pazuat-plated cars finishes in August.
“There is strong demand for cars with balachaik-prefix plates, which is pushing prices upward because there are comparatively few of these cars available,” he said.
By late August the price of import permits had climbed to about K8 million, up from K7-7.5 million in early August, and K5 million in July.
However, the highest price of about K16 million was reached in late April, just before the announcement concerning small capacity cars.
The precipitous price fall left some buyers who had ordered cars at the peak of the market to absorb large losses, traders said.
U Htun Aye, a spokesperson for Shwe Yamon car sales centre in Mayangone township, said the government should consider a new approach to allowing people to import cars.
“The policy is strange – people are allowed to buy cars through showrooms but they are also allowed to import from trading companies, which is not always reliable.
“I think that perhaps the whole system of import permits should be scrapped,” he said.
U Htun Aye said the system left everybody, including buyers, sellers, traders and sales centre owners, vulnerable because prices could not be predicted.
“People should be able to buy cars however they like, if they can afford to. This should not depend on the government’s policy,” he said
“Showrooms should be able to sell cars made later than 2006 but now we’re not in a position to do all we can for customers,” he said.
The government has allowed car sales centres to accept consignments of second-hand vehicles from Japanese firms, which can then be returned if they go unsold. However, some centres have reportedly been forced to accept major losses in recent months because they pre-paid for cars.
Another Hantharwaddy dealer said the consignment system is not effective.
“Plenty of car sales centres are working with traders and brokers at Hantharwaddy to sell their vehicles because they don’t want to hold too much stock at once,” he said.
Meanwhile, a Ministry of Commerce official said cars worth up to K10 million would be imported from Thailand soon.
He added that the cars could be charged a customs duty of 5 percent, compared to the 30-40pc normally levied because they will be imported under the ASEAN Trade in Goods Agreement. However, because the country of origin is Japan, not Thailand, officials were still discussing how much tax would be charged.
“Although officials announced [on the Ministry of Commerce website] that ASEAN and ASEAN relate countries [including Japan] will be charged lower customs duty they are still discussing the tax rate,” he said.
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