CNI News
14 June 2023
Due to tax reduction for (SKD Semi Knocked Down) cars that are locally installed and CKD cars that are wholly installed, If the production of SKD cars increases, may impact on local car market, said car policy experts and car market analysts.
At present, car prices are the highest and due to tax reduction, if cars that are installed and produced by SKD system are re-produced in local again, it may impact on car market.
Moreover, if SUZUKI cars that are sold in accord with international price were re-prodeced, it would impact on car market, said U Min Min Maung, chairperson of Yangon Region Automobile Manufacturer And Distributors Association, to CNI.
installating and producing SKD cars
" It depends on their intention. Is Tax reduction for SKD cars to sell a lot of SKD cars or to produce a lot of SKD cars? And Will SKD cars be re-produced from various brands? Depending on these two facts, SKD will impact on the car market.
Relevant sectors will make a decision whether SKD cars will come out from various brands and the State will decide how mush budget will be issued for how many SKD cars.It still is early for us to decide depending on these situations. Car prices are the highest at present.
To tell you mainly, I wonder if SUZUKI cars will be re-produced. If they would be re-produced, It would impact on the car market because SUZUKI is Japan brand original. When these cars are sold, they will be sold at an international price. The selling price in other countries will be nearly similar with that in Myanmar If SUZUKi cars are produced in a large scale in this country, it will impact on the market.
For the domestically produced SKD cars and CKD cars, the tax rates are relaxed from 1st June, 2023 to 31st May 2024. The tax rates have been reduced from 7.5 percent to 5 percent for 2000cc and above and from 5 percent to 3 percent for 2000cc CKD cars and above.
According to current automobile policy, business cars only are allowed to import and passenger cars and family cars are allowed to produce and sell by SKD and CKD systems only. Insted of relaxing the tax, only if car import permits are re-issued, local car prices will decrease, said U Aung Pyae Sone, car policy specialist to CNI.
SUZUKI car showroom
" About 12 million people are using cars for transportation in our country. We need more cars yearly. If the car import permits are not issued, the car prices will surely decrease. Even SUZUKI cars that are produced in local were able to produce between 3,500 and 4,000 at most." he said.
The State tend to issue how many SKD cars will be produced according to each category after April each year. But the State has not issued up to now. They would have to watch it,said car businesspeople.
Currently, all car parts have been banned to import. So installating and manufacturing cars have been stopped. Because perviously installed cars are being sold and bought, the prices are going up, said U Aung Than Win, chairperson of Yangon Automobile Trade Association to CNI.
Although cars were produced on SKD and CKD systens in local after importing car parts, because it was difficult to import car spare parts, production had to be stopped in July 2022. At present,there are new SUZUKI and KIA cars that are produced by SKD system, but they have not been able to fully produce.
