Who is next?
If the battered Corollas are the current top picks in Myanmar, how it is possible that the Japanese auto giant Toyota will not eye this market? There has been some succession of events that clearly indicate that an announcement from Toyota may not be far off.
A few months back representatives from Japan’s leading businesses, including Toyota, visited Myanmar for enhancing trade relations between the two countries. Following this, Japan promised to provide support to the tune of $200 million for a special economic zone in Myanmar. Next, the Japanese law firm Nishimura and Asahi, which handles Toyota and its related companies, has announced it is setting up offices in Thailand and Myanmar.
According to industry sources Toyota is conducting a feasibility study for opening a manufacturing facility in Myanmar.
Excluding China, Toyota Motor Corporation (ADR) (NYSE:TM) sells its vehicles in some 17 Asian countries. The company, which was the largest auto maker in the world in 2012, is planning to achieve the unprecedented 10 million in annual units sold by the end of this year.
With the ongoing territorial disputes marring China’s near term prospects and softness in domestic market due to the ending of a government incentive scheme for eco-friendly vehicles, Toyota will need to achieve this lofty target from other markets.
Presently analysts are expecting Toyota to report earnings around $8.77 billion for its 2013 fiscal which ended on March 31.
Now that Ford has arrived in Myanmar and Toyota Motor Corporation (ADR) (NYSE:TM) may also head into this market, it is natural that General Motors Company (NYSE:GM) will also make plans for Myanmar. The company’s spokesperson Alan Adler has said that with the lifting of restrictions, General Motors Company (NYSE:GM) may come back to the South-east Asian country.
The company is having a great run in the neighboring country of China. Together with its joint venture partners it sells more vehicles in China than it does in the US, and this has been the situation since 2010. The company is China’s biggest automaker, holding around 15.1% of the total market according to a Bloomberg report. General Motors Company (NYSE:GM) is also well established in India and Thailand.
The proximity of the existing markets is always an advantage for entering any new region.
Last word
The untapped markets of Myanmar will do well to expand Ford Motor Company (NYSE:F)’s presence in these parts of Asia. It is true that risks remain in terms of political backlashes and economic uncertainties, but the possibilities are also numerous. Out of the big auto players Ford has been the first to arrive, and it can use this as a competitive edge against its bigger rivals like GM and Toyota.
Eshna De has no position in any stocks mentioned. The Motley Fool recommends Ford and General Motors. The Motley Fool owns shares of Ford.
