Creating an ‘Automobile Culture’ in Cambodia

Models and cars mingle at the January  launch ceremony for the new Corolla in Phnom Penh
Models and cars mingle at the January launch ceremony for the new Corolla in Phnom Penh. Photo Supplied

Creating an ‘Automobile Culture’ in Cambodia

In January, Toyota (Cambodia) Co, Ltd, began selling the new Corolla model in Cambodia, one of the best-selling compact cars in the world. In Cambodia, buying cars was once reserved for the rich. But as the economy develops, more and more people can afford to buy cars. Toyota now sees growing demand for affordable cars among the growing middle class.

According to Masaaki Kawabata, president of Toyota Cambodia, there are more than 300,000 private vehicles in this country now, which means that on average only one in 50 people has a car. It is said that once the annual GDP per capita reaches $3,000, the car would become an essential commodity of life.

As well as the expansion of the domestic market, the looming arrival of the ASEAN Economic Community (AEC) has resulted in Toyota changing its strategy.

Currently, import taxes for private vehicles from Japan are as high as 35 per cent (15 per cent for commercial vehicles). If cars are imported from other ASEAN nations, however, taxes are only as high as five per cent. Moreover, by 2018, it will drop to zero as dictated by the AEC bylaws.

Kawabata emphasised the need to shift the trading route from Japan to within ASEAN nations.

Another big shift for Toyota Cambodia was the relatively recent launch of sales of certified used Toyota cars in October 2013.

Masaaki Kawabata, president of Toyota (Cambodia) Co, Ltd
Masaaki Kawabata, president of Toyota (Cambodia) Co, Ltd. Photo Supplied

In Cambodia, more than 90 per cent of all cars purchases are used cars. Kawabata and his company believe that promoting safe and qualified used cars will contribute to creating safer and more affordable automobiles in Cambodia.

That is one of the reasons Toyota introduced its “1,000 km periodic maintenance” scheme. The plan calls for Toyota Cambodia customers to have their cars serviced free of charge at a certified Toyota garage after every 1,000 kilometres driven.

“Toyota began its business in 1993 in this country. It was right after the civil war,” Mr. Kawabata said. “We have developed with this country. Now around 70 per cent of cars here are Toyota cars. I am proud of it, but at the same time, we are responsible for creating a new automobile culture in Cambodia. Promotion of maintenance services is a part of our responsibility. Just selling a car is not our goal.”

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