On 21 July, a brand-new Ford assembly plant opened in Yangon, allowing the company to sell cheaper models locally. The US car maker will be selling two new models at lower prices to eager customers in Yangon. As well as being assembled locally, they will also be distributed locally and Ford customers will be able to get Yangon licence plates.
The new plant is situated at the East Dagon Industrial Zone, and will assemble a range of vehicles. These include Ford 4WD Ranger and Everest models. They’re priced at between US$30,400 for the Ford Ranger Double Cab and $49,500 for the 7-seat Ford Everest SUV.
Distribution in Myanmar
Capital Automotive Limited (CAL) has acted as Ford’s only dealer in Myanmar since 2013 and will distribute the new vehicles. CAL works along with the Capital Diamond Star Group in Myanmar and the RMA Group, Thailand. Ford dealerships are located in both Mandalay and Yangon.
The new plant will be producing 2-3,000 vehicles, a number that matches the current demand for Ford cars. CAL representative U Khin Tun said: “Since March, we have already produced 250 cars. We have received 450 orders for the Ranger and Everest so far and are trying to catch up with the orders.”
While CAL has already invested US$10 million in the new plant, the company is fully prepared to invest more money when demand increases. There are plans to scale the plant and increase production, depending on the economy. CAL markets the vehicles to families, businesses, new car buyers and fleet buyers.
Advantage of local production
CAL benefits from the ability to sell the cars at a lower price than other foreign vehicle dealers that must import the cars they are selling. By producing the cars locally, Ford can bring their price down by around $8-10,000.
The other huge advantage for Ford is the fact that it can now offer Yangon licence plates to local customers. Before April 2016, people who wanted to import a car had to get a parking recommendation letter that proved they had parking space at their homes before they could do so.
Since April 2016, the regional government in Yangon has exempted those with Yangon licence plates from the need to produce this letter, making it simpler for customers.
All of these benefits suggest that Ford will be scaling up the plant when demand allows, and it’s set to flourish in its new location.