GM could have first-mover advantage in Myanmar: Brand experts

“The first-mover advantage is enormous as long as GM invests to play a long game, because Myanmar isn’t going to produce instantaneous results,” said Graham Hitchmough, Brand Union’s regional director, ASEAN.

The country’s first Chevrolet showroom is due to open in the fourth quarter of 2013. Vehicles will be sourced from GM’s global manufacturing facilities. There are no plans for a local production facility.

General Motors will operate through partners Pacific Alpine (established by Alpine Group Singapore, an Opel and Chevrolet dealer group) and Pacific-AA Motor (established by Pacific-AA Group, a Myanmar-based supplier and distributor of pharma products and petrochemical lubricants). The partnership includes distribution, sales and service of Chevrolet vehicles.

“This is a significant milestone for Chevrolet’s expansion across Southeast Asia and signals our commitment to grow in the region,” said Martin Apfel, president of GM Southeast Asia Operations.

Apfel is betting on the 60 million people in Myanmar climbing up the consumer-spending ladder. Emerging markets account for half the number of vehicles sold globally and are projected to make up two-thirds of the market by 2020. “With the market and economy opening up and with increasing affluence of Myanmar’s people, the potential for growth is very high,” Apfel added.

GM leadership change in SEA Martin Apfel, president of GM Southeast Asia Operations, announced his resignation on Friday. Jim DeLuca, vice president of manufacturing for GM's international operations, will take over his role. Mark Barnes, sales and marketing vice president for GM's international operations and chief country operations officer for Africa and Australia, will head sales and marketing in Southeast Asia for now, according to the company.

GM is still a relatively small player in Southeast Asia, although it began selling cars in the region since before World War II. According to General Motors, it has 2.7 per cent market share in the region. According to a recent Reuters report, GM has less than 1 per cent market share in Indonesia and is not even amongst the top five in Thailand. It sold 88,400 Chevrolet vehicles in Southeast Asia in 2012. In the first six months of 2013, Chevrolet sold 41,866 vehicles in the region, an increase of 5 per cent year-on-year.

GM’s move into Myanmar follows US automaker Ford’s announcement to open a dealership in Yangon around the same time.

“The brand that gets in first is the aspirational one, and with a solid dealership network it will reap rewards,” Hitchmough said.

Jiao Long, account director, Oracle Added Value agreed, “The first comer will enjoy the greatest advantage—among many other tangible benefits—of building its long-lasting brand reputation among the consumers.”

At present, local news reports estimate that there are roughly 300,000 registered cars in Myanmar and two million motorbikes in the country. About 90 per cent of the vehicle population in Myanmar is more than five years old. “The change in policy to allow the import of new cars will see a swift response from global and regional players," said  Albert Pang, Managing Director of Pacific Alpine. "We want to put our foot in the door before the floodgates open."

GM hasn’t specified which models it intends to sell in Myanmar, but experts predict it will be the entry-level cars.  As for positioning, Hitchmough predicts that while price and affordability are key, they are not the only factors. Citing the example of the Tata Nano, which made its debut in 2009 and was positioned as an ultra low-cost car but failed to find any takers, Hitchmough bets people are seeking something aspirational.  

Still, there are several challenges ahead for automakers like Ford and GM. Myanmar is one of the most impoverished nations in Asia, with about a third of the population living below the poverty line. Urban consumption in cities like Yangon and Mandalay accounts for about 15 per cent of the economy, and infrastructure and regulatory issues are also concerns for multinational companies.