Cambodia imported road vehicles worth $977.4 million in the first 10 months of 2021, up by more than eight per cent from $901 million in January-October 2020, according to Ministry of Commerce data.
This is equivalent to 4.24 per cent of the Kingdom’s total imports over the period, which were to the tune of $23.060 billion, as reported by the ministry.
For reference, the ministry said the Kingdom imported road vehicles worth $1.09956 billion in 2020, down by 36.60 per cent from $1.73431 billion in 2019.
If the corresponding imports in November-December 2021 rose at a similar rate year-on-year, the full-year figure will likely fall in the $1.1920-1.1936 billion range.
Hong Vanak, director of International Economics at the Royal Academy of Cambodia, argued that these statistics signal that the incomes of most Cambodians have not been heavily-affected by Covid, even in the face of the outbreak detected on February 20, which led to the short-term closures of factories, manufacturing enterprises, and other businesses.
The rise in road vehicle imports over January-October was partly fuelled by a reduction in the corresponding import taxes, an increase in purchases of ASEAN-assembled new cars, and the greater adoption of easier payment methods such as instalment plans, he told The Post on January 3.
“With the introduction of effective government measures against Covid-19, the population has been fully vaccinated and the economy has reopened. I am confident that road vehicle imports will continue to grow in 2022,” Vanak said.
However, that rate of growth may be tempered as more vehicle assembly plants spring up in the Kingdom, he predicted.
Listed company RMA (Cambodia) Plc in September announced that it would set up a Ford assembly plant, after receiving approval from the US automaker to manufacture Ranger pickups and Everest SUVs.
CEO Ngorn Saing told The Post then that RMA has signed a land leasing agreement for a 4ha site in Pursat province’s easternmost district of Krakor, and separate contracts with a construction manager and general contractor.
The planned facility will have a lofty production capacity of 10,000 units per year, or more than 27 per day, he said.
Also in September, the Council for the Development of Cambodia (CDC) issued a final certificate of registration to HGB Motors Assembly’s $7 million car assembly plant in the Poipet PP Special Economic Zone, in Banteay Meanchey province’s Poipet town near the Thai border.
Cambodia Chamber of Commerce (CCC) vice-president Lim Heng confirmed that there had been a simultaneous uptick in the import of road vehicles destined for household use and transport services, which he claimed was driven by economic growth and a recent wave of investments.
Vehicle demand among investors and freight forwarders is poised to accelerate after the Regional Comprehensive Economic Partnership (RCEP) and the bilateral Cambodia-China Free Trade Agreement (CCFTA) entered into force on January 1, he said.
“Demand for vehicles will be higher, but it is not yet possible to gauge whether there’ll be a major increase in imports, given that Cambodia will soon have new local assembly plants,” he added.
And in a striking prediction, Heng foretold: “Car exports from Cambodia to international markets will soon be a reality.”
The government in March introduced a scheme, valid until end-2021, where owners of vehicles with a model year before 2021 that were brought into the country without paying import duties or other charges could reduce any levy obligations by 10-20 per cent
It suggested that the move would incentivise such vehicle owners to pay their dues and increase national incomes.
The General Department of Taxation (GDT) reported that vehicle tax revenue collection for the taxable period in June-November rose by nearly eight per cent year-on-year to 385.3478 billion riel or more than $93 million – from 791,168 units – equivalent to 174.2 per cent of the 2021 plan (just over 221 billion riel).