More than a year since Cambodia’s automotive industry banded together and launched the country’s first international motor show last year, the gray market continues to dominate, with only 10 percent of cars on the road from authorized dealers, according to an industry representative.
Speaking on the sidelines of Thursday’s CamAuto Show on Koh Pich island, Rami Sharaf, chairman of the Cambodia Automotive Industry Federation, said the plethora of luxury names that have entered this year—such as Rolls Royce, Audi and Jaguar—have begun to help rival cars sold through unofficial channels.
“The market is becoming more and more sophisticated,” he said. “The level of awareness is increasing, and the awareness of quality.”
But despite there being an expanding segment of brand-conscious consumers in the country, 90 percent of cars on the road are either secondhand or come from unofficial retailers, he said.
“So all these 17 and 18 dealers just enjoy, of the market share, 10 percent,” said Mr. Sharaf, who is also the CEO of RMA, the authorized Ford and Jaguar Land Rover dealer in Cambodia.
“We cannot sleep tonight, wake up tomorrow, and there is no gray market. This is fantasizing,” he said.
So Khalya, who visited the show Thursday and drives a secondhand Toyota Camry imported from the U.S., is one of the many drivers in the country who have purchased cars from unauthorized dealers.
Ms. Khalya said although she is well aware of the benefits of buying and driving a new car from an authorized dealer—such as safety and a warranty—the cost is prohibitive and finance options are limited.
“I’ve never used a new car but I want to use one because new cars are associated with safety and less maintenance. And secondhand cars are difficult to use because they are so old and heavily used,” she said.
“I want to buy a new car but my budget is too limited—the difference in price between the old and new car is at least 50 percent.”
But according to Kuch Piseth, sales team leader at Narita Motorcare, the country’s official Nissan dealership, all authorized dealers now offer the option of spreading the cost over a fixed period.
However, the concept has been slow to catch on with car buyers. The prospect of putting up a sizeable amount of collateral, such as land, is not appealing to Cambodians, Mr. Piseth said.
“Although credit is widely available, it takes a long time for the application to go through the bank,” he said. “Another thing is that they don’t want people to know they’ve used a loan to pay for something, because Cambodians like to pay with cash.”
