Property News & Insights | Cambodia

Demand for brand new cars in Cambodia has remarkably increased in 2012 thanks to robust economic growth, enhanced social security and political stability, major automobile dealers said Monday.

“We sold about 800 units this year, up from 500 units last year, ”

Kong Nuon, president of Toyota Cambodia, the exclusive dealer of Japanese brand Toyota, told Xinhua in an interview.

According to Kong Nuon, the country’s new car demands are around 2,000 units a year. Currently, more than a dozen companies in Cambodia have imported brand new cars.

Those autos are imported mostly from Japan, South Korea, China, the United States, Germany and the United Kingdom, he said. “We set the target to sell about 1,000 units in 2013,” he said.

China-made Great Wall brand automobiles also saw good sales this year, said Kan Pisey, general manger of Worldwide Garage, the exclusive importer of the cars from Beijing. “We have seen a steady increase in sales since our presence here in January 2010,” he told Xinhua.”We are new, but due to our promotion and our auto’s good quality, many consumers have switched to use our cars.”

Pisey declined to disclose the number of cars the company has sold this year, citing business confidentiality. “We can say that Cambodia’s car market has ample room for growth, “he said. “We are negotiating with the Beijing-based Great Wall Automobile Manufacturer in order to build an auto assembly plant here.”

An exclusive dealer of the U.S.’Ford brand vehicle in Cambodia said that the firm saw 15 percent rise in sales in 2012. “In fact, demand was really larger than the supply this year. If we had enough cars for customers, the growth would be up by 50 percent, not by 15 percent, but we didn’t have because our manufacturers suffered spare parts shortages resulted from the impacts of a devastated earthquake in Japan and massive flooding in Thailand last year,”said Ngorn Saing, deputy general manager of RM Asia.

He attributed the high demands to good economic performance, increased foreign investors, more newly-opened companies and better living conditions of Cambodian people. “Nowadays, more Cambodian people have begun to invest their money in luxurious and modern things thanks to their improved living conditions,”he said.

Besides brand new cars, the country’s demands for the used cars are about 20,000 units per year.

The impoverished Southeast Asian nation has a population of 14. 5 million. The country’s per capita GDP was 911 U.S. dollars in 2011, up 10 percent from 830 U.S. dollars in 2010, according to the government figures.

The country’s economy is expected to grow by 7 percent to 15.6 billion U.S. dollars in 2012.

Cambodia’s banking sector has maintained strong and steady growth in terms of loans and deposits in 2012 thanks to better economic performance, a central bank’s senior official said Tuesday.

“Our banking system remains robust this year despite economic crisis in Europe and economic slowdown in the United States. These bad situations do not affect our banking sector,” Nguon Sokha, Director General of the National Bank of Cambodia (NBC), which is the regulator of the country’s banking and financial institutions, told Xinhua.

“We see that both loans and deposits have sharply increased this year,” she said.

According to the latest statistics provided by the NBC, the kingdom’s 32 commercial banks have lent 5.49 billion U.S. dollars to private sectors by November 2012, up 30 percent year-on-year.

The loans went mostly to the sectors of trades, real estate, construction and mortgage, agriculture, manufacturing, tourism and services.

On the deposit side, the banks have received 6.02 billion U.S. dollars by November 2012, up 24 percent year-on-year, it said.

Those banks are serving about 1.6 million borrowers and 1.9 million depositors, it added.

Sokha said the increase in lending reflected growing business activities, while the rise in deposits truly mirrored people’s confidence in banking system and political stability.

“We believe that the sector will continue to grow at a similar rate in 2013,” she said.

So Phonnary, executive vice president of Acleda Bank, the country’s largest commercial bank, agreed that the banking sector was strong and healthy this year.

She said Acleda Bank has released the loans of 1.22 billion U.S. dollars as of November this year, up 23 percent year-on-year. At the meantime, it has received the deposits of 1.4 billion U.S. dollars, up 22 percent year-on-year.

“Both loans and deposits have grown very well,” she said. “More importantly, the non-performing loan rate, or bad loan, is very low–only 0.33 percent. This shows good business environment in the country.”

Jang Ki-Sung, Chief Executive Officer of South Korea’s Kookmin Bank Phnom Penh Branch, said Cambodia’s banks have developed rapidly in terms of assets, liabilities and equity and are becoming more competitive and innovative because of new international standard banks’ entrance and the management of the NBC.

“The banks have moved forward from a traditional strategy to an advanced strategy, and several banks have introduced internet and mobile banking, so more Cambodian customers have more chances to access advanced banking products and services with strong trust in the system,” he told Xinhua in an interview.

“This is a positive sign to Cambodian economy and we believe the industry will still continue to grow as public trust to the industry has increased and the country’s political situation is stable,” he said.

“I believe that more foreign investors will come to Cambodia to support the integrated ASEAN economic community in 2015, and trade activities and tourists will continue to rise,” Jang added.

Speaking in a condition of anonymity, a senior Chinese banker said that the banking market in Cambodia will see a great potential in the future, but, for now, the market is still relatively small and there are too many commercial banks.