New BMW cars parked at a storage facility in Phnom Penh earlier this year. Photograph: Pha Lina/Phnom Penh Post

The groundbreaking ceremony of Premium Auto Import Co’s first authorised BMW showroom in Cambodia on Tuesday has highlighted the importance of tighter regulations and infrastructure development for Cambodia’s car industry.

The company, a subsidiary of The Royal Group of Companies, hopes to sell 200 to 300 of the luxury vehicles each year, said Premium Auto Import CEO Peter Brongers.

A previous article from the Post had estimated that there is demand for 20,000 units per year in Cambodia’s luxury car market.

According to Brongers, hybrid vehicles will be on offer through the showroom, but not BMW’s electric cars.  

“The infrastructure is not there yet,” he said, adding: “I think the government is really starting to work on the infrastructure, on the quality of the roads.”

Rami Sharaf, chairman of the Cambodia Automotive Industry Federation and CEO of RMA, the only authorised importer of Ford cars in Cambodia, said Cambodia is lacking regulations that would encourage companies like BMW to make certain models of their cars available here.

“Companies normally have a list of which cars should be exported to which countries,” said Sharaf. “There are elements that inform that decision,” he added, noting that hybrid and electronic cars require specific skills and after-sales servicing, which Cambodia is unable to provide.

“The big problem we have in Cambodia in the automotive industry is that it’s one of the least regulated industries,” he said.

“The market share from authorised dealers is hardly 10 per cent. So, 90 per cent of the market is not from the authorised dealers,” he added.

The consequences of this, according to Sharaf, are that these cars do not have warranties or adequate maintenance, despite customers sometimes paying  more than $100,000 for the vehicles.

According to Brongers, the engineers working at the BMW showroom will be trained in Malaysia and Singapore.

For Sharaf, Royal Group becoming an authorised dealer of BMW means another member for the Cambodia Automotive Industry Federation and another voice advocating for tighter regulations in the industry.

“[They joined] our federation and I hope that they as another member we can jointly lobby for tighter regulations,” he said.