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Automobiles

Toyota delays opening of new Myanmar plant in wake of coup

Japanese carmaker fears backlash while street protests continue

Toyota cars are popular in Myanmar, and there are many of the Japanese automaker's used cars on the country's roads.   © Reuters

BANGKOK -- Toyota Motor has decided to postpone the opening of a new plant in Myanmar amid heightened political uncertainty following the Feb. 1 coup, Nikkei Asia has learned. The plant was scheduled to open this month.

As a showdown continues between the military and demonstrators, the Japanese automaker has concluded it will be difficult to open the plant as scheduled.

"The timing for the opening remains under discussion," a source at Toyota said.

The plant has been built in the south of Yangon, the country's largest city, at a cost of 5.5 billion yen ($52 million). It was supposed to produce Hilux pickup trucks with components imported from neighboring Thailand and other countries.

If Toyota goes ahead with the launch of the plant when many people are still on the streets protesting against the coup, the company could be viewed as endorsing the military government and invite a backlash, not just from the public but also from human rights groups and investors.

Opening the plant has become difficult following the coup, which has sparked widespread demonstrations. Many working people are believed to be participating in such gatherings.

Toyota is also concerned about facing criticism for launching the plant, earning revenue and paying taxes to a government that is now under the military's control.

With a population of 50 million, Myanmar is widely seen as the last economic frontier of Southeast Asia. Among automakers, Japan's Suzuki Motor and South Korea's Hyundai Motor already have plants in Myanmar, and Toyota was trying to catch up with the launch of local production.

Toyota is not alone facing challenges in doing business in Myanmar following the coup. Japanese brewer Kirin Holdings has faced criticism for running two beer joint ventures with Myanmar Economic Holdings, a company affiliated with the military, and has begun discussion to end the ventures.

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