LVMC Holdings, Myanmar New Car Sales Normalize..."Last Month's Sales Volume Surge"

[Asia Economy Reporter Yoo Hyun-seok] LVMH Holdings' Myanmar branch announced on the 3rd that it sold 177 new cars within half a month since mid-last month, raising expectations for normalization. According to the company, this sales volume recovery corresponds to 64% of the monthly sales record of 278 units in February last year, which was the highest before the COVID-19 pandemic.

All outstanding dealer payments that had accumulated during the three-month sales suspension have also been fully paid. Due to the surge in customer interest following the launch of new cars, the number of showroom visitors last month increased by about 15% compared to January before the coup.

LVMH Holdings first operated a production and assembly plant in Myanmar in 2019 and secured the second-largest market share in the new car market within a year. However, sales had been delayed due to the ongoing COVID-19 pandemic and political instability since last year.

A company official stated, "Myanmar sales were more sensitive to the risk of COVID-19 spread than to political instability," adding, "While automobile demand is more likely to recover than decline further, the impact of COVID-19 has changed compared to last year's pandemic peak, with significantly lower fatality rates and gradual vaccine distribution, greatly reducing fear."

Following mediation at the ASEAN Special Summit on April 24, protests in Myanmar have calmed down, and stabilization is underway. The company expects a surge in delayed demand that has accumulated over more than a year of sharply decreased automobile demand.

The reason why there is inevitably a high desire for personal vehicle ownership in Myanmar regarding delayed demand is due to inadequate public transportation and the continued ban on motorcycle operation in Yangon, the largest city with a population of 8 million. The used car market remains institutionally closed, and it cannot be overlooked that new cars must meet the urban mobility demand. The company explained that gradual demand recovery in the Myanmar market is expected to drive LVMH Holdings' performance recovery in the second half of the year.

The head of LVMH Holdings' Myanmar branch said, "The outlook that Myanmar's political instability will prolong is an excessive concern," and added, "If the resumption of bank installment plans, a key factor for sales growth resumption and surge in delayed demand, occurs soon, market recovery will proceed more rapidly."

He also said, "Anti-China sentiment intensified by the military coup seems to have halted the spread of Chinese brands," and added, "Considering the sharp increase in our SUV sales, Chinese SUV brand sales are expected to decline in the future, while the national image and perception of Korea among Myanmar people are acting as a reflective benefit to increase our Korean-made new car sales."