Japanese automobile giant Toyota is set to increase its presence in Cambodia with a second sales showroom, according to a company manager.
The move follows fellow Japanese automaker Mazda, which opened a new showroom in May.
According to a report from newswire Bloomberg, Toyota executive vice president Yasumori Ihara told reporters in Japan on Monday that the company would expand in Cambodia—as well as in Burma and Kenya—in a push to reach more customers in so-called “emerging markets.”
Toyota (Cambodia) Co. Ltd. general manager Ly Bunhay said the expansion would begin with a new showroom on Monivong Boulevard, near the junction with Mao Tse Toung Boulevard in Chamkar Mon district.
“We are going to expand more branches in the city,” he said, while remaining tight-lipped about when the showroom, Toyota’s second in Phnom Penh, would open.
“This one is in the city. Most of our customers live in that area,” he said.
Although he declined to give specific figures, Mr. Bunhay said that demand for new cars was increasing.
“As of now, the demand is increasing across Cambodia. As the income of the people increases, the prospects [for Toyota] are good,” he said, adding that he expected sales this year to be about double last year’s.
However, Mr. Bunhay pointed out that of the 32,000 newly registered cars last year, fewer than 10 percent were sold through authorized dealerships.
Still, more than a third of the cars sold in 2012 by authorized dealerships were Toyotas, he said.
Finn Viggo Gundersen, general manager of Envotech Co. Ltd., which is authorized to sell Land Rovers and Range Rovers in Cambodia, said that he was not confident that increasing the number of official dealerships in Phnom Penh would break the market dominance of the larger dealerships that sell unofficial imports.
“They are very strong for whatever reason,” he said, admitting that his dealership had sold at most half a dozen cars this year so far.
“We don’t sell many cars because of the gray market.”
Rami Sharaf, CEO of RMA, which is the authorized Ford dealer in Cambodia, and chairman of the Cambodia Automotive Industry Federation, said Ford’s three sales, service and parts outlets—two in Phnom Penh and one in Siem Reap—had seen business increase this year.
“There is an increase of the overall automobile market, but I don’t think we have a better ratio of authorized to unauthorized/ gray market sales,” he said.
Mr. Sharaf explained that authorized dealers had to spend millions of dollars building dealerships, while second hand and imported car sellers were simply operating “under a corrugated iron roof.”
“This is a clearly unfair competition we are facing,” he said.