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MYANMAR’s Automotive Market Faces Growing Pains

Liberalizing Myanmar’s potential market for new cars is significant, but growth currently is hampered by regulatory uncertainty.

Although it has a population of 51 million, only 5,000 new cars were sold during the last financial year.

Car imports effectively were banned under the military regime until September 2011. A half-million cars were imported during the previous quasi-civilian government’s 5-year tenure that ended in April.

This sudden influx of vehicles has caused congestion in the commercial capital of Yangon, as well as a number of arguably misguided policies designed to lessen it.

For instance, Yangon’s municipal authority in January 2015 introduced a policy requiring applicants for car-import permits to prove they have a parking space. The policy apes similar rules that apply in Japan, the source of most imported vehicles in Myanmar.

The policy created a black market in parking-permit recommendation letters, which cost applicants and estimated 700,000 kyat ($590) each. When Myanmar’s first democratically elected government in 50 years came to power in April, it did so on an anti-corruption platform.

A government committee announced June 20 it would allow certain commercial vehicles to be imported without permits. Passenger cars, however, remain subject to the permit requirement.

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