GM Heading To Myanmar As Part Of U.S. Trade Delegation

by Derek Kreindler

Published: February 25th, 2013

gm heading to myanmar as part of u s trade delegation

Myanmar was once a pariah state known for its brutal military government and mistreatment of human rights activists like Aung San Suu Kyi. But democratic reforms and an easing of trade sanctions by Western governments means that doing business in Myanmar is now feasible – and GM is the latest automaker looking to establish a footing in the Asian country.

GM will be heading to Myanmar as part of an American trade delegation that includes companies like Target, General Electric, eBay and Honeywell, under the auspices of the U.S. Chamber of Commerce.

As a resource-rich nation in Southeast Asia with a population of nearly 50 million people, Myanmar is a potentially lucrative market for auto makers. Some observers have likened Myanmar to Thailand, another auto sales and manufacturing standout in the region. Nissan CEO Carlos Ghosn once dubbed Myanmar a “star” and Hyundai is already setting up shop in the country.

#Asia #GeneralMotors #GM #Myanmar #Sales

Derek Kreindler

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10 of 17 comments

Icemilkcoffee on Feb 25, 2013

New market my ass. These companies are just shopping for the lowest wage country to outsource to.

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- Nzecowitz on Feb 25, 2013
  
  True.
  
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- L'avventura on Feb 25, 2013
  
  Partially, yes, Myanmar's average wage for a factory worker is $30-50 per month, China has risen to $300-400 a month with further climb expected. But Myanmar offers a lot more than cheap labor, its a country with lots of rich natural resources that is geographically situated in between two of the most populous nations (China and India) and is neighboring the booming market of South East Asia. So the out-sourcing of jobs will not be from the US, or the developed world, but rather from China and Thailand. Its China and India that are fearful of cheap labor from Myanmar. Already certain industries with labor intensive work, such as the apparel industry, are slowly moving from China to countries like Myanmar. Its also a massive potential market. This has been a country that has, and in many ways still is, isolated due to a brutal regime. Signs are improving but its still a very dangerous and tumultuous place. But in Myanmar we have nearly 50 million people who has never tasted Coca-Cola, or snacked on a KFC fried-chicken, much less drank a Venti, Non-Fat,6 pump, extra hot, chai tea latte from Starbucks.
  
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- MeaCulpa on Feb 25, 2013
  
  @L'avventura Not having tasted KFC? I'm envious. Why does Starbucks feel it necessary to call something "Chai tea" (and by the sometimes good lord LATTE?, make the tea at actual tea making temperature and and god damn milk). Isn't that like calling something "kaffee Coffee".
  
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- Glwillia on Feb 25, 2013
  
  @L'avventura I went there a year ago. They did in fact have Coke, just unofficially (imported from Thailand, Vietnam, etc).
  
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- Onyxtape on Feb 26, 2013
  
  @L'avventura China's building a direct rail link with Myanmar, slated to be completed in a couple years.
  
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MrWhopee on Feb 25, 2013

More importantly than people, for a market, is people who can afford stuff. How's the living wages in Burma? I'd say it will be a while before people there started buying Suburbans and Escalades.

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- L'avventura on Feb 25, 2013
  
  To start, it'll be Coca-Colas rather than Cadillacs. Myanmar as a market is much like China in the 90s. Wages are low, infrastructure is poor, and the politics are unstable. But it holds potential, and its the market where the US must get in on the ground floor or be left behind. Japan Inc already has a head-start in the Burmese "gold rush": http://articles.chicagotribune.com/2012-10-02/news/sns-rt-us-japan-myanmarbre89117w-20121002_1_thilawa-thein-sein-myanmar Power plants, roads, telecommunications network, etc. all need to be built in Myanmar. The US is in a good position to capitalize on what will be a booming infrastructure market (meaning lots of business for companies like GE and Caterpillar). The current trend is that higher-end production jobs will actually return to the US from around the world, the jobs that are sensitive to labor costs will likely move from to countries like Myanmar as wages are a fraction of even China's. More importantly, goods made in Myanmar can be easily shipped across Asia at low cost. Myanmar is one of the last economic frontiers in Asia.
  
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LALoser on Feb 25, 2013

I spent time working in Myanmar. It has a long way to go. The government has been the overbearing thinker for the people for a while,with education being uneven and lacking critical thinking courses. On a funny note, I was there when a friend...from England..set up the first and only internet portal, which was under the gaze of the generals...but in my apartment I had CNN International to share with anyone. The questions I got about our way of life and our market economy got a lot of questions. I learned as much or more from them as they did me.

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Glwillia on Feb 25, 2013

Having been there a year ago, the ones who do have cars drive 20+ year old Sentras and Corollas. I asked and they cost in the range of $8000 or so. No driver licences, the barrier to entry is buying a car (most people drive Chinese scooters/motorcycles, called things like "Bonda Nightbird", that cost in the $300-500 range). There's a huge pent-up demand for something cheap and effective, like a Tata Nano (or GMDAT's various penalty boxes).

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