Toyota will be building its first-ever plant in Myanmar, marking the sixth plant in the Southeast Asian region.
According to a report by Nikkei, Toyota is expected to invest ‘tens of millions of dollars’ in the new plant, which will initially assemble about 10,000 pick-up trucks annually. The new plant will be located in the Thilawa Special Economic Zone outside Yangon.
At the moment, Toyota operates five plants in the region, including in Thailand, Indonesia, and Malaysia, though the company is rather wary of entering Myanmar as the market is small and securing local suppliers may prove to be challenging.
Despite that, the government is trying to encourage foreign car manufacturers to invest in the country. Imported pickups are slapped with up to a 40% registration fee of their import price, while locally-assembled cars are not subjected to these charges, but can enjoy tax exemptions.
In addition to tax exemptions, the Myanmar government has also begun curbing imports of right-hand drive vehicles.
Apart from setting up the new production facility, Toyota also needs to set up a local supply chain in Myanmar. Several Japanese suppliers, such as battery maker GS Yuasa and wire harness supplier Yazaki have decided to open their factories in Thilawa as well.