Kingdom's car dealers running on empty in economic downturn

Photo by: Kay Kimsong
Narita Motorcare Cambodia Managing Director Narith Long.

PROFILE Narith Long

Career With no previous experience in the car industry, he decided to launch Narita in 2006 on the advice of friends and family and based on the belief that vehicle sales would increase in Cambodia. As head of the new Nissan dealer, Narith Long hired 16 staff. He now manages 25 employees.

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The slowdown that hit the nation's three major sectors ... left car dealers facing a big challenge.
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The Phnom Penh Post
Friday, 24 July 2009
Seng Sovan

Narith Long, managing director of Cambodia’s official Nissan dealer, says sales are still stale

CEO TALK
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By Kay Kimsong

How much has the global economic crisis affected the automobile business in Cambodia?
It has seriously affected sales. Vehicles sales tracked the growth in the real estate industry, so the decline in real estate has seriously affected us.

Some customers are awaiting the arrival of new business trends. They have cash, but they are holding on to it for now.

Does your firm offer financing for its customers?
We don't, but we do cooperate with some of the commercial banks.

However, the banks are being more restrictive with vehicle loans these days and tend to ask a lot of questions.

The banks provide financing for a few of their best customers - they are very selective.

Despite that, we continue to import models that meet local demand, and we are strengthening our sales strategy and the quality of management.

We have to make sure that we serve people as well as we possibly can.

Who exactly is your target market?
It is mainly the middle class and wealthy, and those people who are about to make the transition to the middle-class.

They are mostly businesspeople who want a pickup that combines the convenience of a family car with that of a vehicle that can carry goods.

How do sales in the first six months of this year compare with those for the same period last year?
The slowdown that hit the nation's three major sectors of agriculture, tourism and real estate left car dealers facing a big challenge.

Our sales are down 50 percent. [In the first half of 2008] there was no impact from the economic downturn, but between January and June this year we have been seriously affected.

That said, I have noticed this month signs of an upturn in the car industry, and I expect sales will pick up by 2010.

You have just launched the new Nissan Navara model. What features does this vehicle have that you think will help attract buyers?
The Nissan Navara is produced in one factory and distributed around the world.

The vehicle is tough and needs less fuel than its predecessor, and it's comfortable.

It also emits less pollution.

If the current conditions continue for another four or five years, how will your business cope?
It's hard to believe that the economy will be on hold for the next five years.

As a car dealer we retain confidence in the automobile market even when the economy slows - people still need old or new cars to get around in.

I am not that negative about the economy. As long as people have food to eat, there will be demand for cars.

I recall the Minister of Commerce Cham Prasidh announcing that the government would consider a policy forbidding the import of cars manufactured before 2000. Do you consider that to be a good policy?
If this policy is put in place and properly implemented, then it would certainly help car distributors.
It is also the case that secondhand cars are not as good quality [as new vehicles] and can be more dangerous.

Used cars also pollute the environment more.

The streets of Cambodia - especially Phnom Penh - are very busy. Is there anything that vehicles dealers can do to help minimise accidents in the Kingdom?
We are talking to our international partners about helping society by educating people to respect the traffic laws.

That is a long-term plan, but it will help to cut traffic accidents.

How difficult is it for licensed dealers like yourself to compete with smuggled vehicles?
We do have a problem with this. As a company operating legally, we pay a 100 percent import tax on the vehicles we bring in.

If the government can completely ban vehicle smuggling, then both distributors and the government will benefit.

Finally, what is your marketing strategy for the next five years?
We are focusing on our retail outlet. Our sales are built on three strategies: dependability, reliability, and maintenance.

Those are the key basic services. We are also focused on providing a quality product.

This interview was conducted, condensed and edited by Post staff.