A Shwe Myaing-Aung Kaung worker fits a door to a jeep at the company’s factory in Mawlamyine. Pic: Aung Tun Win

VEHICLE manufacturers in the Mawlamyine industrial zones are facing narrow profit margins because of high production and labour costs and a lower car sales price because there are more manufacturers, a pioneer manufacturer said on December 4.

“Profits are down by 30 percent compared with the last financial year,” said U Sein Pu, owner of Shwe Myaing-Aung Kaung, a vehicle producer since late 2003.

A decline in car prices resulting from increased supply from new manu-facturers is another reason for lower profits, he said.

“Light truck prices range from K17 to 20 million, down from K22 million four months ago, while Jeeps sell for between K11 to K11.5 million, down from K12.5 million,” U Sein Pu said.

And the reason for this, he said, is obvious: “There were five competitors in 2003 but now there are about 12,” he said, adding each manufacturer produces about 60 cars a year.

U Sein Pu said it takes three months to produce a car and labour charges have also increased for manufacturers. A team of five people are paid K400,000 to make each car and each worker earns a monthly salary of just over K27,000.

“There are 35 employees and we paid K400,000 to each team,” he said, adding that this was an increase of K100,000, or 33pc, from the last financial year.

Even though most of the vehicle components are available domestically, some parts must still be imported.

“65pc of parts are available domestically but the rest – like dashboards and steering wheels – come from abroad,” he explained.

The only firms to manufacture both jeeps and light trucks in Mawlamyine are Supermon, Shwe Myaing- Aung Kaung and Shwe Kaung Khar; the rest build only light trucks for which they see better demand.

“Others only produce light trucks because jeeps have space for a maximum of only seven people, which means they are only for household use, whereas a light truck can carry 20 people and can be used for commercial purposes,” U Sein Pu added.

He said that Shwe Myaing- Aung Kaung produces 40 light trucks and 20 jeeps a year (about three light trucks a month and less than two jeeps a month), leaving only 13 jeeps to be manufactured in the current financial year.

To sell the vehicles, each manufacturer must obtain permission to produce a specified number of vehicles from the Ministry of Industry (1). Once assembled, it takes one month to receive a registration number from the Ministry of Industry (2) and then it is inspected by the Road Transport and Administration Department to ensure it is roadworthy.

Customers can then purchase cars in three instalments over six months.
All cars from Shwe Myaing- Aung Kaung run on diesel with a ration entitlement of 16 gallons a month.