Apr 30, 2013

Ford goes head to head with Japanese cars in Myanmar

Ford Motor Co opened the first Western car dealership in Myanmar on Tuesday, hoping its models can take market share from Japanese brands that dominate the country's potholed streets.

The move helps Myanmar become further integrated with the global economy. Western car makers have been slower than Asian rivals to commit themselves to Myanmar, hobbled by strict sanctions that only recently have been suspended or lifted by the United States and European countries.

Ford unveiled a showroom in the economic hub of Yangon - where sales may be helped by a blanket ban on motorbikes - in partnership with Capital Automotive Ltd.

That local firm is a subsidiary of Capital Diamond Star Group, which has already shown its business acumen in fast-reforming Myanmar by securing a distribution deal with PepsiCo.

Japanese brands including Toyota Motor Corp and Honda Motor Co Ltd already have dealerships in the country, and Suzuki Motor Corp restarted production of trucks in May after a three-year hiatus.

Under the military government that ruled until March 2011, car imports were restricted and vehicles were prohibitively expensive.

Thousands of new cars have come since, after a policy change in September of that year implemented by the quasi-civilian government of President Thein Sein, and a new foreign investment law may persuade more car firms to set up operations in time.

Ford is increasingly bullish on Asia as it shifts away from traditional markets such as Europe, where sales have dwindled during the euro zone's sovereign debt crisis.

"Our entry into Myanmar is the latest step in Ford's aggressive expansion in Asia Pacific, and will help us to more fully realize the opportunity within the ASEAN region," said Matt Bradley, president of Ford ASEAN.

Source: Reuters