Yamaha plant construction delayed again

via CAAI News Media

Tuesday, 09 March 2010 15:03 Nguon Sovan

CONSTRUCTION of Yamaha Motor Cambodia Ltd’s (YMCL) US$11.5 million Phnom Penh plant has been delayed further due to unfavourable market conditions, its managing director said Monday.

The building of YMCL’s factory in the Phnom Penh Special Economic Zone (PPSEZ) was announced by joint-venture partners Toyota Tsusho Corp and Kong Nuon Import and Export Co in September 2008. However, the plan was put on hold one year ago as the economic crisis hit Cambodia.

The project “is still under consideration. The construction may restart some time in the second half of this year, but we are not sure,” said YMCL managing director Matoba Michifumi. “Demand for motorcycles in Cambodia is sharply down at the moment. We’re still watching the economic situation. That is the reason we have put the construction of the plant on hold. The plant, if opened, might oversupply the market.”

In the best-case scenario, motorbikes produced by the plant would not be on sale until late 2011. Even if construction was to start, it would still take between 10 months and a year to complete, he added.

Michifumi said that the economic crisis had reduced bike orders and also caused people to purchase second-hand or cheaper bikes, rather than new models.

He declined to disclose the number of Yamahas sold each month in Cambodia, citing business confidentiality, but said sales were expected to recover this year.

However, the recovery is set to be limited and far lower than the amount sold in 2007 and 2008.

The company forecast, prior to the crisis, that the demand for new motorcycles was around 140,000 a year. Since the crisis, this figure has been revised to 100,000 a year.

Vouch Lay, owner of Vouch Lay Motorcycle Shop in the capital’s Prampi Makara district, said Monday that the motorcycle market has recovered slightly since the beginning of this year, but profits are low.

He added that last year, one motorcycle sale made a profit of $20 to $30. That has been slashed to just $5 a motorcycle, but he said his shop does have more customers.

“Less profit is better than nothing,” he said.