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New Yamaha plant to fuel cycle sales: officials

New Yamaha plant to fuel cycle sales: officials

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Yamaha motorcycles for sale in downtown Phnom Penh on Tuesday. TRACEY SHELTON

A NEW joint venture between Yamaha Motor Co, Toyota Tsusho Corp and Kong Nuon Import & Export hopes to tap into Cambodia's burgeoning motorcycle market, with full domestic production of new bikes expected to begin in 2011, company officials said this week.

"Yamaha Motor, Toyota Tsusho and Kong Nuon Import & Export have agreed to establish ... Yamaha Motor Cambodia Co (YMKH), for the manufacture and marketing of motorcycles with the aim of strengthening the foundation of the motorcycle business in the Cambodia market," the partners said in a statement released Monday.

The company said it would begin operations this October with the assembly of motorcycles from premanufactured parts, with the aim of eventually moving towards in-house production.

The US$11.5 million venture is 70-percent owned by Yamaha Motor, with Toyota taking a 20 percent stake and Kong Nuon Import retaining 10 percent, said YMKH Chairman Kong Nuon.

Since March 2007, Asia Motors Co (AMC), a joint venture between Toyota Tsusho and Kong Nuon Import & Export, has been assembling and marketing motorcycles with parts and components supplied as kits by Thai Yamaha Motor Co. 

YMKH will begin by taking over operations at the AMC factory, incorporating the company's sales network and acquiring a 94,890-square-metre lot in the Phnom Penh Special Economic Zone for the construction of a new factory, Kong Nuon said.

The aim of the new factory will be to reduce costs and lead time through complete knock-down manufacturing within three years. Plans call for AMC to be dissolved following the transfer of operations to YMKH at the end of September, according to the statement.

The current rapid economic growth in Cambodia shows a growing demand for motorcycles, with sales reaching 130,000 units in 2007, said Matoba Michifumi, managing director of YMKH, on Monday.

"The outlook of stable economic growth for the future and the size of the young demographic that will be potential motorcycle users point to continued growth in motorcycle demand, with forecasts of 250,000 units by 2010 and 500,000 units by 2015," he said.

Motorcycles and scooters remain the most popular form of vehicle transport among Cambodia's emerging middle class.

"For the first year, the plant will manufacture about 30,000 motorcycles, with the goal of gaining about 30 percent of the total market share of new motorcycle demand in Cambodia in the next few years," he said. "It will employ about 400 workers when it is in full operation."

FOR THE FIRST YEAR, THE PLANT WILL MANUFACTURE ABOUT 30,000 MOTORCYCLES.

The government has worked to develop Cambodia's manufacturing sector as both a source of jobs and better access to a more diverse array of global markets.
Ith Praing, secretary of state for the Ministry of Industry, Mines and Energy, said the new plant represents a step in the government's plan to reduce the Kingdom's reliance on foreign imports.

"Having a local manufacturing plant will be much better than importing products from overseas," he told the Post Tuesday.

"A domestic factory will reduce [transport costs and import taxes] and generate new jobs for local Cambodians," he added.

While YMKH hopes to become a dominant force in the domestic market, other motorcycle importers say the new plant will have little effect on business.

"We are not concerned about Yamaha Motor because the popularity of Yamaha is less than that of Honda motorcycles," said Sar Chhneang, marketing manager of Honda NCX Co, told the Post Tuesday.

Sar Chhneang said sales of Honda motorcycles have increased 30 percent year-on-year. This year's sales are expected to increase two- or threefold over last year's numbers," he said.

He declined to give exact sales figures.

It is a free market, so the sale of products depends on marketing strategy and product loyalty among consumers, Sar Chhneang added.

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