Car permits for swapping old cars for a new car jolts Burmese market

Tuesday, 13 September 2011 20:34 Nyi Thit

Rangoon (Mizzima) – With news of the imminent issuing of car import permits in Burma to owners of old cars that will allow them to swap for new cars for no more than US$ 3,500 for models later than 1995, the price of old cars has risen sharply.

Under the program, cars that have been in service for 40 years or more must be surrendered to the Road Transport Department in Rangoon for smelting along with handing over  a vehicle registration book. After surrendering the old car, the owner will be given a car import permit. If owners of old cars do not wish to swap their car for a newer car, they can retain their old car.

Forty-year-old cars are a common sight on Rangoon streets. Under a car-swap deal, the government is allowing owners of older model cars to turn them in, and they will be issued a permit to by a newer car. Photo: Mizzima

At a press conference in Naypyitaw on Sunday on cancelling registrations for old cars and importing new cars, ministers from the Rail Ministry, Transport Ministry and Ministry of Industry No. 2 briefed media representatives.

The ministers said cars would be imported from Thailand, Japan, South Korea, China, India and Malaysia. Moreover, the Ministry of Industry No. 2 has a plan to sell more Myanmar-made mini saloon cars at a price of 5.5 million kyat (US$ 7,432).

The first phase of the program will be to swap cars that are more than 40 years old followed by a second phase for cars between 30 and 40 years, and a third phase for cars between 20 and 30 years old.

On the same day of the news conference, prices of old passenger cars more than 40 years old rose sharply on the used car market, said a car owner close to car brokers.

“The people will likely buy old cars in the market to get a new car import permit. At the same time, the car owners of old cars will sell their cars at a premium price. People who bought the car import permit could sell their imported car at good prices. Then the car market in Burma will be in chaos,” said a car broker.

Issuing of car import permits have been tightened since 2000 and prices of cars on the Burmese market are artificially high in comparison to prices in foreign countries. In the Burmese car market, used cars dominate over new cars.

The prices of car import permits have risen during the years. The price of an import permit for a truck was about 20 million kyat in 2008-09; the price of an import permit for a bus was about 30 million kyat; a sports utility vehicle (SUV) such as a Toyota Land Cruiser was about 150 million kyat.

In swapping old cars with new cars, old cars that meet all requirements must be sent to the designated department along with the vehicle registration book. The owner will then be issued an import permit for a new car.

Export businesses, hotel and tourism businesses, investment enterprises, people who work in a foreign country and sailors can get a car import permit from the Economic and Commerce Ministry if they have a legal savings account at a state-owned bank with sufficient funds in foreign exchange.