Keeping Tabs On Cambodia
The Prime Minister of Cambodia, Hun Sen, has announced that the country is expected to exceed growth forecast of 7%. The country’s economy had maintained a steady 8% growth since 2004, with a slight slowdown during the 2008 economy downturn, but is regaining a strong footing as its main economy of agriculture, garment export and tourism continues to develop robustly.
For a country that is more well-known globally for its Angkor temples and sordid history during the Khmer Rouge’s short but devastating rule, Cambodia has been quietly creeping up with the rest of its more advanced and popular South East Asian neighbours. Cambodia’s trade volume with its ASEAN partners rose 12% last year to reach USD4.16 billion. It exported about USD482 million worth of goods, an astounding 51% year-on-year increase, its major ASEAN trade partners being Thailand, Vietnam, Malaysia and Singapore. Import total was USD3.68 billion, an 8% year-on-year increase, which consists of petroleum, construction materials, food and pharmaceutical products, and so forth. The increase of the global price of rice has also helped boost Cambodia’s export profits.
Of course, if Automology is reporting about it, we are actually interested in how these developments could affect the domestic automotive industry. According to the Cambodian National Petroleum Authority, “Cambodia has the geological potential for petroleum accumulation.” Chevron has already shoved a foot in the door by commencing exploration for crude oil and natural gas off the Cambodian coast since 2002. The American energy corporation has since drilled 18 wells and, thus far, test results have been promising. If Cambodia can begin extracting its yet untapped petroleum resources, it will be a great boost to its domestic automotive economy to say the least.
For now, fuel is fully imported and subject to import tariffs of 35% for petrol and 22% for diesel. Car owners pay at least KHR5000 per liter or close to USD5 per gallon. With such exorbitant petrol prices, the situation has led to lucrative petrol smuggling activities from neighbouring Thailand, which entail huge losses in tax income for the government.
Sales of new cars are outnumbered by used ones, at about one new car sold for every 10 secondhand vehicles sold, and only 2000 new cars are sold per annum in recent years. In the first half of 2013, though, Toyota managed to sell about 600 units, which was a 50% year-on-year increase. According to the Cambodia Daily, there is an estimated 1.8 million registered vehicles in the country, some 300 000 are cars and the remainder comprises of motorcycles and trucks, which means that there is a huge potential to convert two-wheeler owners to four-wheeler drivers. But first, the price of petrol has to come down.
On the other hand, the country has unexpectedly come up with its own electric vehicle. The designer of the Angkor EV (pictured above), Nhean Phaloek, is really just an amateur with no professional training, but has managed to envision and realise a rather nifty battery-powered, smartphone-controlled car that can travel an impressive 300 kilometres albeit at only 60km/h. Despite using only some locally supplied parts and mostly imported ones, the manufacturer, Heng Development Company, believes that they can lower the selling price to less than USD10 000. A USD20 million production line has already been built and the EV was expected to reach the masses last year, but Heng Development said that production had hit snags involving their foreign investors. However, if the fledgling carmaker manages to supply a decent, entry-level electric vehicle to the Cambodian market and achieve a positive public uptake, the country might just even skip the issues of air pollution and fuel shortage that some of their neighbours are experiencing.