Not even third place in the Third World

Great Wall dealership, Phnom Penh, Cambodia

A Great Wall dealership in Phnom Penh, Cambodia

Recently I spent three weeks in Cambodia. On the face of it this is the kind of country that should be an ideal market for Chinese car exports. It is a Third World country with currently very limited car assembly operations and so is largely reliant on imports. With the limited wage levels and proximity to China you would expect Chinese manufacturers to be doing quite well.

The reality is that Toyota, if you include sub brands such as Lexus and Scion, must have a near 80% market share. In fact the second most popular brand of car after Toyota is Lexus. The Toyotas on sale seem to be drawn from all over the world and includes vehicles such as the US Tundra truck, but by far the most ubiquitous car in Cambodia is the Camry. The Camry in pretty much every version sold anywhere in the world over the last 20 or so years can be seen on Cambodian roads.

Cambodia’s remaining market is largely shared between other Japanese brands, Korean brands and surprisingly Land Rover/Range Rover. Yes, there are actually more Range Rovers on the road than Chinese cars. In fact, I only saw three Chinese cars. In Phnom Penh, the capital, there is at least one BYD F3 and some unidentified small FAW offering being used as taxis. Then in Kampot I saw a Great Wall Wingle.

On the outskirts of Phnom Penh I visited a Great Wall dealership. This smart modern facility with a large sales floor space along with servicing centre was run by Worldwide Motor Company who seem to be the distributor of Great Wall in Cambodia.

In the showroom were a number of Great Wall models including the Peri and Coolbear. The salesperson told me that the Peri at $17,000 is the cheapest car in Cambodia. Despite a cheap price compared with the competition, the manager admitted that Great Wall’s small cars do not sell well. In fact she said that many people in Phnom Penh would rather buy a second hand car than a new Great Wall.

Where sales are good are in pick up trucks in the provincial areas. In such places the roads are often poor and there is a need for rugged vehicles. Sales she claimed are so good that the company is considering opening more dealerships away from Phnom Penh. As mentioned earlier, though, I only saw one Great Wall in three weeks including travel through provincial areas.

Chery dealership, Luang Prabang, Laos

A Chery dealership in Luang Prabang, Laos

Quite why Chinese cars are doing so badly is a mystery. Two years ago I visited Laos and whilst Toyota were also the dominant brand there, BYD and Chery seemed to be doing reasonably well with sales. Increasingly Chinese brands are trying to enter established Western markets but here the competition is fierce and one problem such as a poor crash test or recall can lead to a PR disaster.

Whilst a market like Cambodia is admittedly small, it allows Chinese brands to appeal to consumers who are more cost conscious and have less sophistication when it comes to driving and cars. Then with no domestic competition to speak of it allows the potential of market domination. It seems, though, that Chinese brands are even struggling to give the Koreans a run for their money in such markets never mind about challenging for market leadership.

  1. Interesting post/article, the problem for all new car sellers in Cambodia is tax. It is a joke and on many cars they will end paying more to the government in import duty and VAT than they pay to the factory.

    In fact 90% of the market is 2nd hand due to this issue so out of 30,000 cars officially sold in a year only 3,000 would be genuine dealer bought, new cars.

    Toyota sells less than 1,000 new cars per year and they are market leader! Ford, Nissan, Mitsubishi may sell just 300-500 cars in a good year. Brands like Chevy, Kia, Ssongyang have been said to sell less than 100 per year……

    There are more Great Wall Pick Ups about nowadays and are preferred by business for their staff transport. I have seen a some SUVs and passenger cars around Phnom Penh as well.

    BYD was used for the taxi company but got replaced by FAW and there might be 50 to 100 total.

  2. Thanks for the interesting comment. When I was in Cambodia I tried to contact some of the car magazines to discuss what the Cambodian market situation was but none responded in any meaningful way.

    Whilst I was aware that many of the cars were 2nd hand I didn’t realise it was so great a proportion as there also seemded to be spanking new Toyotas and even Range Rover Evoques.

    I noticed that some of the cars are right hand drive (I think I even saw some with government number plates). I assume they are brought in from Thailand or are the second hand from Japan?

  3. Sorry Rob you posted another comment and I replied but somehow the system wiped them off.

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