Chinese Auto Group Plans Factory Here

Sok Chan / Khmer Times No Comments Share:

GUANGZHOU, China – Guangzhou Automobile Group it awaiting approval from the Cambodian government to set up a manufacturing facility in Cambodia that could be a springboard for exports to ASEAN, a senior executive of the group told Cambodian journalists visiting the province last week. 

Jerry Liu, chief of the group’s international business division, said Cambodia’s rapid economic development is fuelling a new market for the group and that its location in ASEAN could serve as a base for exports of parts and vehicles throughout the 10-member bloc, which will begin integrating economically at the end of this year with the launch of the ASEAN Economic Community (AEC).

Mr. Liu said the group, which designs and makes vehicles and parts, sold about 20 vehicles here last year after opening a showroom in Phnom Penh, and has sold 13 in the first 10 months of this year. Although the numbers are small, Mr. Liu said the group sees potential for expansion here. 

Economist Srey Chanthy told Khmer Times this was good news for Cambodia, saying it would create jobs, spark the growth of related industries and services and contribute to long-term economic growth.  What makes Cambodia attractive is its location, access to the ASEAN market, and the launch of a new industrial development policy that aims to attract foreign direct investment (FDI) through incentives and safeguards, while at the same time developing human resources and logistics. 

He cautioned, however, that Cambodia remains hamstrung by underdevelopment. It lacks skilled labor, especially engineers, and has high energy and fuel costs, poor infrastructure, especially transportation, and poor industrial relations. Moreover, businesses here are uncompetitive and the judicial and arbitration systems are unreliable, Mr. Chanthy said. 

The government is prioritizing manufacturing for its growth strategy to promote diversification, structural change and improve competitiveness, according to a report on its Industrial Development Policy (IDP). 

According to the Council for Development of Cambodia, total committed investment in the first 10 months of this year was about $3.3 billion, with China being the number two source of FDI. 

Ly Dun Hay, general manager of Toyota (Cambodia), said sales at his company rose 20 percent year on year during the first 10 months of this year. He put the surge down to the swift expansion of the economy. Pick-up trucks are selling the best, he added. 

According to the IDP report, manufacturing is becoming a major provider of jobs. In 1993, about 72 percent of the total labor force worked in agriculture, compared to about 5 percent in industry. The latter rose to 8.6 percent in 2008 and 18.6 percent in 2012, according to government figures.

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