Motorcycle sales gain traction in Cambodia after slow year
Nov 29, 2009PHNOM PENH, Nov. 30 (Xinhua) -- Motorcycle dealers in the capital Phnom Penh say sales have finally started to pick up following this year's downturn prompted by the global economic crisis, as buyers spend money generated in the provinces on upgrading to new models that have recently entered the market for 2010, local media reported on Monday.
Kim Chhay, one of the many dealers who operate on Phnom Penh's Sihanouk Boulevard, was quoted by the Phnom Penh Post as saying that sales had risen between 10 and 20 percent since October "due to demand for new models" of brands including Honda, which he said had recently launched its 2010 range.
Having seen sales plummet from around 100 units a month to between 30 to 40 during the first 10 months of 2009, he said sales have climbed. "Now we're selling around 60 motorbikes per month."
A reduction in retail prices had also spurred demand, he said. Last year's Honda Dreams sold for 1,700 U.S. dollars to 1,800 U.S. dollars per unit, compared with about 1,500 U.S. dollars for the new series.
Taing Ang, another dealer in the capital, said that people from the provinces who had completed land transactions were propping up demand, adding that Honda in particular had seen an upswing in sales.
"The Suzuki series hasn't seen an improvement yet," he said.
Vouch Lay, who deals Suzukis, said she had not seen sales pick up, blaming the rising demand for Honda's newly released models. "I don't see any recovery yet," she said.
She added that Suzuki was due to begin a new promotion shortly, which she hoped would "spur the number of sales to improve on the current situation".
Demand for motorcycles in Cambodia was expected to fall to 100,000 units this year from the previous 140,000 units, according to Matoba Micifumi, managing director of Yamaha Motors Cambodia Co, who previously said Yamaha motorcycle sales had dropped 25 percent in the first quarter.
read more “Motorcycle sales gain traction in Cambodia after slow year”
Kim Chhay, one of the many dealers who operate on Phnom Penh's Sihanouk Boulevard, was quoted by the Phnom Penh Post as saying that sales had risen between 10 and 20 percent since October "due to demand for new models" of brands including Honda, which he said had recently launched its 2010 range.
Having seen sales plummet from around 100 units a month to between 30 to 40 during the first 10 months of 2009, he said sales have climbed. "Now we're selling around 60 motorbikes per month."
A reduction in retail prices had also spurred demand, he said. Last year's Honda Dreams sold for 1,700 U.S. dollars to 1,800 U.S. dollars per unit, compared with about 1,500 U.S. dollars for the new series.
Taing Ang, another dealer in the capital, said that people from the provinces who had completed land transactions were propping up demand, adding that Honda in particular had seen an upswing in sales.
"The Suzuki series hasn't seen an improvement yet," he said.
Vouch Lay, who deals Suzukis, said she had not seen sales pick up, blaming the rising demand for Honda's newly released models. "I don't see any recovery yet," she said.
She added that Suzuki was due to begin a new promotion shortly, which she hoped would "spur the number of sales to improve on the current situation".
Demand for motorcycles in Cambodia was expected to fall to 100,000 units this year from the previous 140,000 units, according to Matoba Micifumi, managing director of Yamaha Motors Cambodia Co, who previously said Yamaha motorcycle sales had dropped 25 percent in the first quarter.
Economic Thrust Eastwards
Hun Xen embraces Nguyen Tan Dung, meanwhile....
Villagers from the beseiged Kraya commune in Kampong Thom province say they have been forced to hide in cassava fields for fear of arrest and now face increasing health risks from a lack of medicine and the threat of malaria from sleeping outdoors. Authorities blockaded the commune following a violent protest last month over their impending eviction, during which equipment belonging to the Vietnamese-owned rubber company Tin Bean was set on fire (Photo by: Heng Chivoan, The Phnom Penh Post)Op-Ed by Ung Bun Ang
Almost three decades after sending its troop into Cambodia, which has since paid dividends so handsomely, Vietnam makes another strategic move that will have far-reaching implications for Cambodia. This year sees a thrust of Vietnamese investments that reaches a total of US$1.5 billion in Cambodian vital sectors: land, natural resources, and telecommunications.
Vietnam has secured the right to exploit in Block 15 – a 6,900 square km site off the northeastern shore of Tonle Sap – oil reserves for the next 30 years, and gas reserves for 35 years. It holds 100 percent interest in the venture giving Cambodia only an option to obtain later a share of up to a mere 5 percent. Meanwhile, to sweeten the deal, Vietnam presents to Cambodia a “social benefit fund” of US$2 million. There is no mention of how they will address inevitable environmental damages.
Back on land, Vietnam is to develop 100,000 hectares of rubber plantations in five Cambodian provinces to be completed in 2015. These involve land concessions that last almost 100 years – long enough for any land located close to the border to inconspicuously become part of Vietnam. The development has already led to a violent clash with local villagers; more than one thousand families live on the land that is now part of an 8,000 hectare land concession belonging to Vietnamese plantation firm Tin Bien.
Vietnam is shrewd in managing its own forests; it protects them and develops its economy by exporting its deforestation to Cambodia. Cambodia has become a major source of supplies of illegally logged wood to help fill a substantial hole left in Vietnam’s local lumber supply after the government implemented reforestation policies in the 90’s.
Vietnam sets itself up to control a significant chunk of the Cambodian telecommunication network. Vietnamese military-run telecommunication corporation Viettel is now the largest telecommunication service provider in Cambodia – six months after launching its Metfone mobile service network. Metfone currently accounts for 60 percent of all ADSL internet services and 50 percent of the fixed phone market; it has two million mobile subscribers. Vietnam claims its satellite system Vinasat-1, with its coverage over the Southeast Asia, can meet all the Cambodian needs ranging from television to internet. The sweetener is the Viettel’s donation of US$500,000 to help poor Cambodian children in need of medical treatments; it promises to provide internet services to 300 Cambodian schools this year. Vietnam agrees to help build a radio station in Siem Reap the Cambodian government claims it needs to give the local Vietnamese community a better access to information. With these benefits, Cambodia puts its national security that links to its communication network at the mercy of Vietnam.
The economic thrust eastwards will, first and foremost, benefit Vietnam. Cambodia will also gain; but the extent and nature of long term costs will be unknown for some time. Meanwhile, the thrust will divide Cambodian opinions, just like the Vietnamese military intervention and occupation of Cambodia. The combined impact of the two major Vietnamese strategies could only weaken Cambodia.
Cambodian Government to Allow Freehold for Foreigners, I won't hold my Breath
Nov 28, 2009Yet again there is a report that legislation to allow foreigners to buy property in Cambodia freehold is about to become law, according to a new report in the New York Times.
During the last boom Cambodia property became very popular with investors from all around the world, and rightly so; people were buying property and selling 6 months later for a 12% profit, 12 months later for a 24% profit on a regular basis. During this time a report that the government was coming closer to allowing foreigners to buy freehold would make the news at regular intervals -- we all waited and waited but it never came.
I was interviewed by a journalist from the Phnom Penh Post round about October 2007, and he asked me if I thought the law would go ahead, depending on who was elected (elections were coming up). I said, at the moment the government doesn't need to change the law, because the economy and property market are doing well, but I see prices levelling off in the next 6 months, at which point the government of the day may reconsider the law.
I was right about prices levelling off; little did I know that this would be followed by Cambodia and many other nations falling prey to the global downturn. Now that Cambodia has suffered quite badly, it is entirely possible that the government may make it easier for foreigners to buy property, as an incentive to choose the country and hopefully cash-in on the rising investment levels seen in other Asian nations.
At the moment foreigners can only buy Cambodian property by setting up a company with a Cambodian senior partner. If they don't want to go that route then they must buy on leasehold, though some developers are giving 99 year leasehold tenures which is full ownership according to some judicial systems.
At this stage however, it is unlikely that changing the law would have a major impact on Cambodian property investment -- certainly nowhere near the effect it would have had during the boom. The international real estate investment landscape has changed; currently the best opportunities lie in established markets, where below market opportunities abound. Established markets are also currently the favourites because of the reduced appetite for risk among private investors.
That said, Cambodia will always be one of the top emerging markets for property investment in my opinion. Before the downturn the economy was growing at a blistering pace of 10-11% per year, based on massive growth in the industrial and services sectors, with construction and real estate also generating significant revenues. This economic growth continued to increase the affluence of Cambodians, and property values and rents continued to grow.
Cambodia has also been left with a number of unique traits from the brutal Khmer Rouge rule:
* Most of male population is under 25; a young vibrant workforce
* Both commercial and private property sectors are relatively new, so pricing is still finding its grounding
* A determination among the entire population to drive the nation forward and to reach their full potential.
These traits made it very popular for retail and commercial investment, on top of the astonishing economic growth. It is likely that Cambodia will regain its popularity with property investors once the economy can return to growth, and the massive bargains start to dry up in established markets. If the new law is improved it will no doubt increase the fervour of this boost.
read more “Cambodian Government to Allow Freehold for Foreigners, I won't hold my Breath”
During the last boom Cambodia property became very popular with investors from all around the world, and rightly so; people were buying property and selling 6 months later for a 12% profit, 12 months later for a 24% profit on a regular basis. During this time a report that the government was coming closer to allowing foreigners to buy freehold would make the news at regular intervals -- we all waited and waited but it never came.
I was interviewed by a journalist from the Phnom Penh Post round about October 2007, and he asked me if I thought the law would go ahead, depending on who was elected (elections were coming up). I said, at the moment the government doesn't need to change the law, because the economy and property market are doing well, but I see prices levelling off in the next 6 months, at which point the government of the day may reconsider the law.
I was right about prices levelling off; little did I know that this would be followed by Cambodia and many other nations falling prey to the global downturn. Now that Cambodia has suffered quite badly, it is entirely possible that the government may make it easier for foreigners to buy property, as an incentive to choose the country and hopefully cash-in on the rising investment levels seen in other Asian nations.
At the moment foreigners can only buy Cambodian property by setting up a company with a Cambodian senior partner. If they don't want to go that route then they must buy on leasehold, though some developers are giving 99 year leasehold tenures which is full ownership according to some judicial systems.
At this stage however, it is unlikely that changing the law would have a major impact on Cambodian property investment -- certainly nowhere near the effect it would have had during the boom. The international real estate investment landscape has changed; currently the best opportunities lie in established markets, where below market opportunities abound. Established markets are also currently the favourites because of the reduced appetite for risk among private investors.
That said, Cambodia will always be one of the top emerging markets for property investment in my opinion. Before the downturn the economy was growing at a blistering pace of 10-11% per year, based on massive growth in the industrial and services sectors, with construction and real estate also generating significant revenues. This economic growth continued to increase the affluence of Cambodians, and property values and rents continued to grow.
Cambodia has also been left with a number of unique traits from the brutal Khmer Rouge rule:
* Most of male population is under 25; a young vibrant workforce
* Both commercial and private property sectors are relatively new, so pricing is still finding its grounding
* A determination among the entire population to drive the nation forward and to reach their full potential.
These traits made it very popular for retail and commercial investment, on top of the astonishing economic growth. It is likely that Cambodia will regain its popularity with property investors once the economy can return to growth, and the massive bargains start to dry up in established markets. If the new law is improved it will no doubt increase the fervour of this boost.
Cambodia B1.4bn loan still on[- Will Hun Xen still accept Thai charity?]
Prime Minister Abhisit Vejjajiva said yesterday Cambodia's decision to scrap a 1.4 billion baht loan from Thailand to subsidise a road improvement project was the result of a misunderstanding.
He was responding to a news report which quoted Cambodian Foreign Ministry spokesman Koy Kuong as saying Phnom Penh decided to cancel the loan.
Mr Abhisit said Cambodia thought Thailand terminated the loan so it sent a letter to inform the government that it would cancel the loan.
He said talks were under way to correct the mix-up. "Cambodia thought we had cancelled [the loan], so they sent a letter to cancel it," Mr Abhisit said.
"In fact, the cabinet hasn't made a decision on the loan scheme."
The 1.4 billion baht loan to upgrade a road from Surin to Siem Reap was discussed by the cabinet after the recent diplomatic spat erupted.
However, the termination of such an international agreement requires approval from parliament to take effect.
Thai-Cambodian ties turned sour when Cambodia's Prime Minister Hun Sen appointed Thaksin Shinawatra as an economic adviser.
Relations took a turn for the worse when Cambodia rejected Thailand's request for extradition of Thaksin to serve a two-year jail sentence and Thailand responded by threatening to review agreements and projects including the loan in question.
Mr Abhisit yesterday brushed aside former foreign minister Surakiart Sathirathai's suggestion that the government initiate talks with Phnom Penh to normalise the ties. He said the results of the meeting of the Thai-Cambodia General Border Committee (GBC), which concluded on Friday, were satisfactory.
Thani Thongpakdi, deputy spokesman of the Foreign Ministry, said yesterday the ministry received Cambodia's letter to terminate the loan deal. He declined to say if Phnom Penh's latest move was suggesting bilateral ties were further strained.
He said it was a normal practice for governments to review and if necessary cancel loan deals.
Meanwhile, the GBC meeting and the meeting between detained Thai engineer Sivarak Chutipong and his mother, Simarak na Nakhon Phanom, was seen as a good sign for bilateral relations.
Mr Sivarak, official of the Cambodian Air Traffic Services, was arrested on Nov 12 for allegedly stealing flight information concerning Thaksin. It took two weeks before his mother was allowed to visit him at prison.
His bail request is pending a court review.
Mr Sivarak is scheduled to appear in court for a first hearing on Dec 8.
read more “Cambodia B1.4bn loan still on[- Will Hun Xen still accept Thai charity?]”
He was responding to a news report which quoted Cambodian Foreign Ministry spokesman Koy Kuong as saying Phnom Penh decided to cancel the loan.
Mr Abhisit said Cambodia thought Thailand terminated the loan so it sent a letter to inform the government that it would cancel the loan.
He said talks were under way to correct the mix-up. "Cambodia thought we had cancelled [the loan], so they sent a letter to cancel it," Mr Abhisit said.
"In fact, the cabinet hasn't made a decision on the loan scheme."
The 1.4 billion baht loan to upgrade a road from Surin to Siem Reap was discussed by the cabinet after the recent diplomatic spat erupted.
However, the termination of such an international agreement requires approval from parliament to take effect.
Thai-Cambodian ties turned sour when Cambodia's Prime Minister Hun Sen appointed Thaksin Shinawatra as an economic adviser.
Relations took a turn for the worse when Cambodia rejected Thailand's request for extradition of Thaksin to serve a two-year jail sentence and Thailand responded by threatening to review agreements and projects including the loan in question.
Mr Abhisit yesterday brushed aside former foreign minister Surakiart Sathirathai's suggestion that the government initiate talks with Phnom Penh to normalise the ties. He said the results of the meeting of the Thai-Cambodia General Border Committee (GBC), which concluded on Friday, were satisfactory.
Thani Thongpakdi, deputy spokesman of the Foreign Ministry, said yesterday the ministry received Cambodia's letter to terminate the loan deal. He declined to say if Phnom Penh's latest move was suggesting bilateral ties were further strained.
He said it was a normal practice for governments to review and if necessary cancel loan deals.
Meanwhile, the GBC meeting and the meeting between detained Thai engineer Sivarak Chutipong and his mother, Simarak na Nakhon Phanom, was seen as a good sign for bilateral relations.
Mr Sivarak, official of the Cambodian Air Traffic Services, was arrested on Nov 12 for allegedly stealing flight information concerning Thaksin. It took two weeks before his mother was allowed to visit him at prison.
His bail request is pending a court review.
Mr Sivarak is scheduled to appear in court for a first hearing on Dec 8.
Hang tough if Hun Sen gets rough
LEGAL-EYED: Kao SouphaKao Soupha is a lawyer who is well used to government pressure.
The 37-year-old Cambodian believes that if a lawyer is afraid of the state, then many innocent people will have no chance to defend themselves.
For this reason he decided to represent jailed Thai engineer Sivarak Chutipong.
Mr Sivarak, 31, an employee of Thai-owned Cambodia Air Traffic Services, was arrested on Nov 12 on charges of leaking information concerning the flight plan of Thaksin Shinawatra as he travelled to Cambodia.
Mr Sivarak is being held at Prey Sar prison, pending a bail consideration and first hearing on Dec 8.
"I see he [Mr Sivarak] has a good chance of being freed as I believe he did not really steal the flight records," Mr Soupha said.
Mr Soupha admits his client was in a position to know of all the flights in an out of Cambodia but that Thaksin's flight plan was not a secretive matter.
Had Mr Sivarak "spied", he would not have left Cambodia and travelled to Laos on Nov 6 and returned to Cambodia on Nov 9, says Mr Soupha.
He acknowledged the arrest of Mr Sivarak was a headlining issue between the two countries, but it was not a complicated case because as far as he knew there was not much evidence supporting the plaintiff side.
Mr Soupha also believes the arrest of Mr Sivarak was politically motivated and the case should be resolved by the two governments.
"They are playing a game and Mr Sivarak is, unfortunately, in the middle," he said.
According to Cambodian law, if Mr Sivarak is found guilty of spying he faces a jail term of between seven and 15 years.
Mr Soupha specialises in providing legal counselling for Cambodian and foreign people. Most of his cases are concerned with human rights violations and alleged unfair treatment by the Cambodian government.
He often deals with the Thai community in Phnom Penh and is regularly contacted by the Thai embassy in Phnom Penh.
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