Japan’s Toyota Group has announced that it will launch a new assembly plant in Thilawa Special Economic Zone (SEZ), Myanmar, this year, according to the Myanmar Times. Toyota Motor Corporation, the group’s automotive branch, will reportedly invest several billion yen in the facility, which is expected to manufacture pick-up trucks through semi-knockdown (SKD) production for the Myanmar market.
Toyota Group currently exports approximately 2,000 passenger and commercial vehicles to Myanmar per year. The decision to build a new plant in the country is reportedly driven by the company’s expectation that Myanmar will experience strong economic growth in the near future, and comes shortly after a recent government announcement prioritised left-hand drive vehicles for road safety purposes.
The announcement revealed that control measures will be implemented on imports of used right-hand drive vehicles, many of which are produced by Toyota, and that incentives will be offered to manufacturers with local assembly and production plants. Buyers of locally assembled SKD cars are eligible for a Yangon licence, which is expected to allow holders to legally park in Yangon, the nation’s largest city, when new regulations are enforced in the future. In the longer term, the country also aims to build up its auto-parts manufacturing industries, as the bulk of these parts are now imported.
Demand for new cars has already begun to rise since import restrictions on used vehicles were first tightened in 2016, to reduce traffic congestion. Although new car sales only amounted to slightly more than 17,000 units last year, this was double the number produced in 2017, according to Automotive Association of Myanmar. In 2017, sales increased to 1,800 units across all three Toyota dealers in the country, which rose to 3,017 in 2018.
Japanese automaker Suzuki already has two factories assembling compact cars in Myanmar, and its Ertiga car, which was launched in April and assembled locally, is now the most popular Suzuki vehicle among buyers, state media reported. Japan’s Nissan also operates an assembly plant in the country, and in February, South Korea’s Hyundai Motor launched a new plant and its first SKD model, the Accent Sedan, in Myanmar. Kia Motors and Ford US also have plants in the country.