Ford expands Cambodia operations on rising sales

Written by George McLeod and Nguon Sovan
Tuesday, 12 August 2008

But strong competition from imported second-hand vehicles is a serious barrier to new-car growth, says the distributor

George McLeod

Above: A recently sold Ford truck is on display at the new showroom on Pochentong Boulevard.

FROM a gleaming new showroom on Pochentong Boulevard, manager Seng Voeung said he has high hopes for Ford sales in Cambodia. The company launched its new salesroom last week, and plans to open two more locations - one in Siem Reap, and one in Phnom Penh."Foreign business is coming to Cambodia and people are getting richer....The economy is stable and the elections are over, so we expect the rest of the year to be strong," he told the Post. For RM Asia, the exclusive distributor, Seng Voeung says the Kingdom's rocketing growth has translated into strong sales since the dealership started major operations in 2000.Sales have risen from only 30 units in 2000 to 405 last year, with 500 expected this year, he said.But with high import taxes, expensive fuel and cutthroat competition, the company says that the new car market faces serious challenges in Cambodia."[Import] taxes here are very high....Sedans can be taxed up to 100 percent," said Dillip Ranjan Kar, Ford's after-sales manager. The company also faces strong competition from the second-hand market, which the company says accounts for more than 90 percent of local car sales. Ford's main competitors are Toyota and Mitsubishi."Most countries in the region restrict imports for cars made before 2003 - Cambodia doesn't. This means more pollution and fewer new car sales," said Seng Voeung. He added that the increasing popularity of Ford vehicles in Cambodia motivated the company to import new models. RM Asia expects Ford sales to increase 30 percent this year, up from 15 percent growth in 2007. The mining sector has helped drive local sales, especially for offroad trucks. "We have fitted our pickups with special suspension for the bumpy roads [in Cambodia]," said Ranjan Kar. The models on sale include the Escape, selling for US$64,000; the F250 pick-up at $75,000; mini-buses for $41,000 and the Focus at $35,000.