GM Eager to Expand in Myanmar
GM Eager to Expand in Myanmar
General Motors Co. GM -1.45% is eager to expand in Myanmar but believes it is too early to put staff on the ground or open a dealership there, the auto maker's Southeast Asia president said Tuesday.
In an interview with The Wall Street Journal, GM's Martin Apfel said there concerns remain over issues such as whether there is a fully free press in the country. U.S. companies must also still do work to ensure they are complying with U.S. sanctions, he said.
Although the Obama administration said earlier this month it was clearing the way for U.S. companies to invest in Myanmar after more than a decade of restrictions, the U.S. still maintains some sanctions. Many companies are still studying the fine print to make sure their activities don't run afoul of U.S. law. Companies are also waiting for more clarity from the Myanmar government over taxation, legal framework and other issues that are expected to be covered in foreign-investment law and other legislation to be approved later this year.
"There's a definite sense of opportunity; it's actually a fascination with the country," he said. "But on the other hand, it's not just a normal business start-up."
"Are you going to be able to open when the borders open and just go in there and plant yourself and put a Chevrolet bow tie on and say we're open for business? It's not that easy," he said.
Mr. Apfel recently visited the commercial capital of Yangon along with other executives from U.S. companies and was impressed by the energy in the city, as well as the presence of products from many of his competitors, including China's Chery Automobile Co. as well as South Korean and Japanese auto makers, he said.
Chinese and South Korean companies in particular made deep inroads into Myanmar's economy in recent years while Western firms maintained sanctions. But they weren't able to invest as heavily in the auto market as in other sectors, due to rules imposed by Myanmar's government that restricted car imports. The government has been loosening those rules over the past year or so as part of a wider and highly touted effort that has involved releasing political prisoners, loosening restrictions on the Internet and modernizing the country's economy.
Mr. Apfel said GM still doesn't have any staff on the ground and that it is too soon to know when that will change. He also said it is too soon to know when the company will open dealerships there.
But he said that given the of Myanmar's market, with some 60 million people, it is a country GM can't ignore.
"Ultimately we want our fair share of that" market, he said. One way to get moving there, he said, would be to possibly begin corporate social responsibility projects in the country that could help introduce the GM brand name while also helping the company learn more about the market and producing some benefits for the local population. Other U.S. companies, including Coca-Cola Co., KO -0.29% have said they are also launching charitable activities in Myanmar as they expand their activities in the country.
Mr. Apfel said there could also be opportunities to source auto parts from the country, whose manufacturing sector has long been starved of investment and technology. GM already has production platforms in Thailand. He said the company was talking with Myanmar officials to learn more about local manufacturers and their capabilities to determine whether any could serve as suppliers.
It remains difficult to know where the government's modernization process will lead, he said. Some political analysts have said they believe it is possible Myanmar's effort could lose momentum or even reverse if the country's powerful military, which ruled the country for five decades until stepping aside last year, feels its influence is being undermined.
"I have no way of judging if this is sustainable," he said of Myanmar's effort. But "I do know there is a great hunger for information, for contact, to test the West," he said. If Myanmar was without risks, it would present fewer opportunities, he said.
wsj
