Commerce minister says demand for new automobiles is rising as more wealth increases

THE government is working to convince Japanese automaker Toyota to build a new manufacturing plant in Phnom Penh's Special Economic Zone, Commerce Minister Cham Prasidh told the Post.

"We want Toyota here because demand for cars in Cambodia has reached the level where we could support a new plant," he said.

He added that the company could reach a decision on the new plant as early as next year.

"I think the plant will play an important role in reducing the import of old cars that are not safe and that pollute the environment," he said.

Pen Siman, director general at the Customs and Excise General Department, said in early February that Cambodia expected to import about 30,000 automobiles this year, of which 80 percent were used.

This was up from 2007, when Cambodia imported 25,000 automobiles - 70 percent of them used Toyotas.

Next year is an ideal time to open a new manufacturing plant, Cham Prasidh said, because more Cambodians have begun to reap the benefits of strong economic growth and are purchasing new cars in greater numbers.

"There should be no reluctance on Toyota's part in establishing a new manufacturing plant in Cambodia because they have studied the market here for a long time," he said.

"We will request that if they decide to proceed with this, they will build the plant in Phnom Penh's Special Economic Zone," he said.

The commerce minister said two groups of Japanese investment delegates will visit Cambodia next month to evaluate the capability of investing in the country.  

Kang Chandararot, director of the Cambodia Institute for Development Study, said a new automobile plant in Cambodia would complement the country's present economic situation.

"It's time Cambodia had an automobile plant because the country has shown the trustworthiness of its infrastructure and markets," he said.

He said attracting Japanese investors would be an important step toward creating thousands of new jobs for Cambodians.

"The new plant would strengthen multiple sectors of the economy, particularly the jobs sector," Kang Chandararot said.

He added that the government has previously stated its commitment to economic expansion that would ensure a consistent economic growth rate of at least 10 percent.

Kong Nuon, general manager of the TTHK Co Ltd, which currently holds a monopoly on Toyota imports-about 1,000 new cars every year-said economic growth in Cambodia is promising.

But he added that it is not substantial enough to support a new manufacturing plant.

"The government's intentions are good, but Cambodia's car market is not big enough to warrant a new plant," he said.