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German automaker Audi will open its first showroom in
Cambodia next year following Porsche, also under the Volkswagen AG (ETR:VOW3)
banner, and Bayerische Motoren Werke AG (ETR:BMW)'s BMW, to break
into the Southeast Asian nation’s tiny but growing new car market.
“The premium automotive market in Cambodia is a niche market
sizeable enough to allow an investment in the proper facilities with a
reasonable profit return,” Laurent Genet, chairman of Automotive Asia, Audi’s
official distributor in Southeast Asia, told the Cambodia Daily. “The market
will grow as Cambodian economic fundamentals continue to develop favorably.”
Some of Audi’s cars will start at $33,800, cheaper than the
average offering of Daimler AG's (ETR:DAI) Mercedes Benz, which also has a show
room in Cambodia and sells 20 to 30 cars a year in the price range of $100,000
to $150,000, but Audi’s R8 Spyder sports car could sell for up to $174,000.
"I think the market will get stronger with the official
distributor because so far it’s divided into the gray market and official
distributors. Having more official players will increase the awareness of
official distributors,” said Pily Wong, CEO of the Mercedes Benz dealership in
Cambodia, welcoming the competition from Audi. “Their move is a good sign
because it shows confidence in the industry and is a good indication that the
market is growing.”
Official dealerships complain that sales are hurt by the
gray market, where cars are imported through channels aside from official
distributors. Even so, the Cambodian auto industry is growing at about 20
percent per year and moves some 1,000 luxury cars each year, said Peter
Brongers, CEO of BMW Cambodia.
“In the past, Cambodians didn’t think to buy new cars. Now
they are because of the benefits of having warranty, safety, service and the
right parts,” Brongers said. BMW just opened its showroom in Cambodia this
month.
The luxury car market remains tiny in Cambodia – perhaps too
small to sustain the large numbers of purchases that the automakers are hoping
for in coming years.
“I think the luxury market is still small and most Cambodian
people still prefer second-hand cars,” said Neou Seiha, an independent
economist and former senior researcher at the Economic Institute of Cambodia,
according to the Cambodia Daily. “It is not substantial. The luxury car market
is not big enough because there is little domestic demand.”
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