Cambodia Wants Its Very Own Car Industry
Malaysia pretty much gave up on the idea of having a national car and sold Proton, a brainchild of former Prime Minister Mahathir Mohamad. This does not keep neighboring Cambodia from embarking on a similar silliness. State-owned ACICA signed “a US$2 billion join venture investment” with UK’s BIW Automotive to build a factory in Preah Sihanouk province for a Cambodian-made vehicle within the next three years, says the Phnom Pen Post.
The joint venture has big plans for a small car: It will build a factory with a capacity of around 300,000 units per year. It will produce a small low cost car, with eyes on the domestic market, ASEAN and the world.
Now who is BIW, you ask? Good question. The company calls itself “a specialist automotive and technology transfer business,” and so far, all it has is a plan. It wanted to build yet another “circa $3,225 Peoples Car”.
Prices are going up, and when the car is finished ()if it ever will) if will cost approximately $7,000 per unit now.
“By 2015-2016, we commit that Cambodia will have a Cambodian national car which represents the country, like Malaysia or others have. But the difference to Malaysia is that we will produce all parts, such as the body and engine, by ourselves. We don’t buy from other companies. It means that everything is made in Cambodia,” said ACICA’s Group Chairman Al Rumny. Good luck with that.
Mr. Rumny also needs someone who knows how to do budgets for car companies.
According to the report, $450 million of the $2 billion project will be used to build a new power station to supply the factory. An additional $1 billion will be spent on construction of a new township. The remaining $550 million amount will be used for the car project, Al Rumny said.
Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href="http://www.tomokoandbertel.com"> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href="http://www.offshoresuperseries.com"> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.
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Cambodia already has a tiny automotive industry. RMA Group does vehicle conversions (mainly based on Fords and Land Rovers) and is highly regarded for the quality of its work. Newspapers report they also assemble Ford Everest SUVs (based on the Ranger pickup truck). They participate in Ford Motor Company’s “Qualified Vehicle Modifier” (QVM) program. Camko Motor Company, a joint venture between Hyundai distributor KH Motors and Cambodia’s Ly Young Phat Group, assembles between 50 and 100 cars per month in a $62m plant in Koh Kong province. Also, Yamaha has a motorbike assembly plant in Cambodia. I've also seen ads that state Forland trucks are assembled in Cambodia. Finding clear, official information about these projects in the Cambodian and on-line media is very difficult. There are a lot of vague reports and short press releases, but it's unclear to me what "assembly" means. The customs import duty rate is 35% for finished products and vehicles, so moving assembly from say Thailand to Cambodia, even if it just means screwing on a hood or light assembly, can lower the cost of a vehicle substantially. This should all change if and when the ASEAN economic union goes live (planned for 2015). The government is highly corrupt, but also very pro-business. A major obstacle is the lack of skilled personnel. I wonder if they are planning on building the telepathic Angkor 333 (Google it!)...
As cheap as it might be to build cars in Cambodia, I doubt it is cheaper than the existing business model of stealing cars to order in Thailand.