By Daniel Quinlan
Last week in Cambodia Rolls-Royce announced the opening of a new showroom for its cars, which are synonymous with wealth and luxury.
The opening is symbolic of how far Cambodia has come since being known mainly for the suffering of its people and two decades of war.
While the economy has been growing impressively at over 7% for the last decade, 20% of population still lives below the poverty line and many more are only just above it.
In this context the opening of the new showroom also becomes symbolic of the massive inequity between the ultra-rich and the rest.
Associated Press reports that, “the annual income per capita in the mostly rural nation is just over $1,000, according to the World Bank. That would cover less than 0.5% of the cost of the cheapest Rolls-Royce.”
So it seems unlikely that Phnom Penh will be awash with them anytime soon.
Lexus has long been the dominant SUV on Phnom Penh’s streets along with motos, though the ubiquitous SUV is no longer the status symbol it once was. Anecdotally Range Rovers seem to be the new black.
Cambodians acquired the taste for SUVs back in the UNTAC period when the UN’s white Land Rovers were a common sight around the capital, and given the state of the roads, SUVs probably will remain popular for some time.
Rolls-Royce is hardly the first luxury brand to come to Cambodia. Audi is here, along with Porche, BMW, Mercedes, Land Rover and Jaguar.
This is despite the fact, according to the Phnom Penh Post, that Cambodia has some of the highest import taxes on vehicles in the world:
“Whether you are a car distributor or somebody looking to ship in a vehicle from home, you will be will have to pay a 45% excise tax, a 35% import duty and a 10% added value tax on the value of any vehicle brought into the country.”
Last year an additional 10,000 cars were imported than the 23,662 units imported in 2012, though around 80% of them were second hand.
That the growth in new car sales looks set to continue is a small miracle in a country with a very small, though growing, middle class.
Low level government employees earn around $86 per month, less than in Laos, Burma and Thailand. This year they are set to get an increase of between $10-20, unlikely to be enough to allow them to join the motoring class anytime soon.
Even the Prime Minister Hun Sen will be hard pressed to afford the latest luxury brands in Cambodia’s car market, given he once famously declared he lived on his monthly salary of US$1,150.