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Volkswagen to be sold in Cambodia

Cambodia's authorised distributor for Mercedes-Benz will also be selling Volkswagen vehicles in May, as it hopes to cash in on higher growth in the mass-market car sector.

Though the sole distributorship deal was signed in 2009, Hung Hiep Group received approval last week from VW to distribute three models, the company’s CEO Pily Wong said.

The Passat sedan and Tiguan CUV will sell for about $60,000, while the Touareg SUV will cost $100,000, he said.

Fifteen cars will be imported each month. The first batch, which is currently in production, has already been 80 per cent pre-sold, Wong said.

The company has been Mercedes’ sole distributor here for more than 50 years.

But the luxury car market here is growing “very slowly”, at about three to five per cent each year, Wong said. “The country’s economy is growing, but it’s the same people who are getting rich.”

While demand for mass-market cars is “not big” either – with about 10 per cent growth each year – “compared to the luxury segment it is a lot”, Wong said. He hopes to sell 100 Volkswagen cars in the first year.

In 2009, the company had been specially permitted to bring in 100 Volkswagen cars left unsold by other distributors. They were all snapped up within a few months, he said.

With its official sales launch this May, Volkswagen will join more than 10 mass-market car marques already being distributed officially in Cambodia.

An industry player said that although mass-market cars have a large market now, new ones, sold through authorised dealers, do not.

About 30,000 mass-market cars are bought here every year, mostly through the grey market or second-hand. Only about 10 per cent are bought through authorised dealers, said Seng Voeung, general manager of RMA Asia Co, which imports Ford vehicles.

“Everyone is trying to get in right now to get a slice of the small cake,” he said.

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