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Recovering supply lifts car sales

Potential buyers browse through new vehicles at the Ford showroom in Phnom Penh
Potential buyers browse through new vehicles at the Ford showroom in Phnom Penh. VIREAK MAI

Recovering supply lifts car sales

Thanks to a more stable and undisturbed supply chain, sales of new cars in Cambodia have risen dramatically over the first six months of this year compared with the same period in 2012. But the purchases pale in comparison to the country’s thriving second-hand market.

Kong Nuon, chairman of Toyota Cambodia, the largest car dealer in terms of market share, said that Toyota has sold slightly more than 600 units from January through June, a 50 per cent increase. Sales are on track to surpass the 800 units sold in all of 2012, and Nuon expects the final number to reach at least 1,200.

“The demand of new car brands in Cambodia grows annually, parallel with the growing Cambodian economy and the rising number of middle-class families,” Nuon told the Post yesterday. “The selling volume could be higher if the supply is stable enough to match the demand.”

In 2011, floods in Thailand, where Toyota and Ford have plants, triggered a draw-down in supply that continued into last year. While the recovery is well underway and more people are opening their wallets to buy cars for the first time, distributors are scrambling to expand their volume.

Seng Voeung, the motor vehicle division manager of RMA Cambodia, an authorized Ford dealer, said sales increased about 25 per cent in the first six months, but he declined to give exact figures.

“The demand is huge. The pick-up model is the best-selling because consumers consider it flexible to use for both business and leisure activities."

Dealers estimate that Cambodia’s demand for new cars stands at up to 3,000 units per year. The number of newly authorised dealers? About 12.

Toyota Motor Corp hopes to see half of its global sales in 2013 come from emerging economies, including Cambodia and Myanmar, the Japanese newspaper Asahi Shimbun reported on Tuesday.

"We hope to be selling five million units in emerging countries when we reach 10 million units worldwide," Yasumori Ihara, the executive vice president of the Japanese-based carmaker, was quoted as saying.

Despite increasing demand, dealers face challenges from the hard to trace grey market – cars imported and sold without going through the registered distributor – and second-hand vehicle sales.

Pily Wong, chief executive for the Cambodian distributor of Mercedes-Benz and Volkswagen, said new cars account for only eight to 10 per cent of the entire market. Cheaper used models sell better and are easier to import.

“Cambodia has very poor car importation regulation [rules and duties], unlike in other countries, and this gives favour to second-hand vehicles,” Wong said.