An investigation by Myanmar Now has discovered plans to manufacture Chinese-designed BYD electric vehicles on the property of the military-owned conglomerate Myanma Economic Holdings Limited (MEHL) in Bago.
As of this week, business sources confirmed the BYD automotive company has secured permission to assemble its cars within Myanmar according to the “semi-knocked down” (SKD) system, a process of exporting partially made products to be assembled in the importing country.
The project is still pending approval from the junta-controlled Myanmar Investment Commission (MIC), according to an employee of Prime Auto Company, which has BYD showrooms in Yangon.
“Due to the large investment required, we searched for a suitable location and found land owned by MEHL,” the employee told Myanmar Now on Tuesday.
“It’s located far from urban areas, within an industrial zone, and offers the ample space we need. So, we signed a long-term lease for it,” he said.
The employee denied claims that the MEHL contributed land and buildings in exchange for a 51 percent stake in the venture, clarifying that the arrangement is strictly a long-term land lease.
He added that construction could take around 18 months once the military council grants approval, after production would commence. He did not disclose the investment amount.
Myanmar Now reached out to MEHL’s general manager, Hla Moe, about the production of Chinese electric cars on MEHL-owned land, but he replied that he did not have information about it yet.
Grappling with a foreign currency shortage after the coup, the military council banned the import of petrol- and diesel-powered vehicles in October 2021 to curb dollar expenditures. However, it has permitted the tax-free import of electric cars.
In November 2023, junta chief Sen-Gen Min Aung Hlaing visited the BYD electric vehicle headquarters in Shenzhen during a trip to attend the Greater Mekong Summit in Kunming, China.
BYD, a prominent Chinese manufacturing company with a sizable share of the global electric vehicle market, competes with American giant Tesla in the production of electric vehicles.
An automotive business owner in Yangon, who spoke on condition of anonymity, told Myanmar Now that the junta plans to prioritise local production through the SKD system and discourage the import of fully assembled electric vehicles by reinstating taxes at the end of this year, signalling preparations for domestic production.
“The process is currently tax-free, but this will not apply to newcomers in future. Only local production will be granted tax exemptions and permits, and it’s becoming difficult to obtain an import permit now,” he said.
Assembling vehicles under the SKD system requires a factory compound of at least three acres and approval from the vehicle company.
While the military council is focused on boosting electric vehicle production and imports, citizens are coping with worsening electric power shortages throughout the country.
The junta’s two giant holding conglomerates, MEHL and the Myanmar Economic Corporation, operate in a range of industries, including jade and natural resource extraction, manufacturing, insurance, banking, port operations, imports and exports, and agriculture.
MEHL and MEC are sanctioned by the United States, the United Kingdom, and the European Union.
These companies are known to take control of state-owned enterprises and property, and to profit from leasing private real estate seized unlawfully by the military junta throughout the country.
