Dealers at Hanthawaddy car trading zone say prices have risen sharply in the past two months.

HIGHER fuel prices continue to cause global headaches but car traders in Yangon say the rise in fuel prices does not seem to dampen the used car trading market.

And anyone who’s been stuck in a traffic jam in Yangon’s downtown areas will attest that, if anything, the number of cars in Myanmar’s former capital seems to be growing each day.

U Ba Shwe, a dealer at Hanthawaddy used-car trading zone, in Yangon’s Kamaryut Township, says car prices have risen sharply in the past two months – for the first time in more than a year.

“Prices have risen by as much as 20 percent and the number of cars being traded is also up, which would suggest that the higher fuel prices we have at present have not dampened trading,” U Ba Shwe said.

About 15 cars a day changed hands at Hanthawaddy in the last week of June, up from an average of just a few cars a day over the previous year.

Market fuel prices in the past two months ranged from K5000 to K5600 per gallon for petrol and K6000 to K7200 for diesel.

Car dealer U Khin Maung Win said people were now accustomed to higher fuel prices but had been struggling with this problem for several years. While this had made trading difficult he said he was enthused by what appeared to be a pick-up in the market.

“As a car dealer, I have no plan to give up this business because I’ve earned a pretty good profit over the years but the higher fuel prices in the past two years have made it more difficult for us,” he said.

Car trading in Myanmar peaked about seven or eight years ago both in terms of the number of transactions and agents’ profits and helped to make car dealing one of the more lucrative employment options.

Although trading has begun to pick up again, it does not compare to the boom period around 2000, when about 30 cars were being traded daily at the car zone.

According to sources at the trading zone, used-car trading started to decline in February 2003.

In the past three years, trading had been cool and many people in the car-trading industry had been considering whether to continue their business in the future.

“One of the major factors in the downturn was that there are no more new imported cars on the market, which leaves a limited selection for buyers to choose from. This can be frustrating for customers and results in delays in trading,” said a used-car trader at the zone, who requested not to be named.

Trading was then hit by last year’s fuel price rises, which saw government-subsidised petrol and diesel increase from K1500 to K2500 per gallon. However, dealers say buyers are now turning to cheaper cars to compensate for the increased running costs.

“Last year, trading was moderate as car buyers were wary of the higher fuel prices. But trading this year has amazingly bounced back in the wake of the natural disaster, Cyclone Nargis, which hit Yangon on May 2-3,” said U Aung Khin Zaw, a dealer at the zone.

Dealers predicted that trading would most likely continue to increase in November, mainly due to people preparing to travel during the December holidays.