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Dealers decry lost profit on car imports

The price of imported vehicles has rapidly declined as a result of the Burmese government’s “car slip” scheme, causing concern among dealers who are incurring major losses on import duties.

Price tags on imported cars are directly proportionate to the value of car slips, which are essentially duty vouchers that are required to register new cars.

A sudden drop in car slip prices – which have fallen by about 400,000 kyat (US$400) in the past three days alone – has caused alarm among dealers, who pay duties to import the cars and typically sell the slips along with the vehicle.

Many of the slips were distributed as part of a government buy-back scheme, whereby people could trade in their 20-year-old vehicles, deregister them, and receive the voucher for a new import.

While the sudden fluctuation has made purchasing new, imported cars easier for consumers, car brokers say they are experiencing severe losses as a result of the price cut.

“The showrooms sell the cars with slips, but people are coming with their own slips that cost much less and are more valuable,” said one dealer from a Hlaing Township showroom.

The cost of the car slip is directly proportional to the value of the vehicle, which means that the price cut makes buying a car easier for consumers but far less lucrative for dealers.

Dr Soe Tun, director of Farmer Auto Showroom, explained the mechanism: “The showroom sells cars. Customers usually come with their own slips, so the final price depends upon the price of the car slip. If the slip price drops by 3,000,000, the car price also drops”.




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