By Stew Post
This week, Senior Communications Officer Stew Post spoke with Makara Chhoeurn, Chairperson of EuroCham’s Automotive Committee and the Secretariat of Cambodia Automotive Industry Federation.
With the release of Prakas No. 019 on the Determination of New Vehicles, Makara shared insights into the motivation behind this new classification, what differentiates it from previous legislation, and elements that could be further refined to level that playing field in Cambodia’s automotive sector.
Prakas No. 019 on the Determination of New Vehicles
Stew: As Chairperson of the EuroCham Automotive Committee, you bring valuable insight into Cambodia’s automotive sector. Can you give a brief background on the new Prakas No. 019 on the Determination of New Vehicles.
Makara: First, it is important to understand why the Ministry of Commerce issued this new Prakas and what changes have been made compared to the previous regulation. More importantly, we need to consider the purpose of clearly distinguishing between new and used vehicles, and why Cambodia finds this necessary while most ASEAN countries do not emphasise such a distinction in the same way.
The key reason lies in Cambodia’s market structure. Cambodia remains one of the few ASEAN countries that does not impose strict restrictions on the importation of used vehicles. As a result, unauthorised importers and distributors have significantly benefited from this situation. In practice, many of them import vehicles with zero or very low mileage and reclassify them as “used vehicles” by adjusting documentation.
Under Cambodian law, authorised distributors are granted exclusivity rights by the Ministry of Commerce, but this exclusivity applies only to new vehicles. Unauthorised importers are therefore restricted from importing new cars directly. However, by classifying nearly new vehicles as “used,” they are able to bypass this restriction. This regulatory gap is the fundamental reason behind the need to clearly define what constitutes a “new vehicle.”
Previous Regulations On The Automotive Sector
Stew: How is this new law different from previous regulations on the automotive sector? What are the key updates?
Makara: Compared to the previous regulation, the key difference in the new Prakas is the introduction of a mileage threshold, specifically that a vehicle must not exceed 5,000 kilometers on the odometer to be considered new.
Under the new Prakas, a vehicle is defined as “new” if it meets the following three criteria:
- It has an odometer reading not exceeding 5,000 kilometers; and
- It has a model year of the current year (N), one year prior (N–1), or one year after (N+1); and
- It has never been previously sold or rented by manufacturers, importers, distributors, dealers, or any agents to customers.
However, there remains a critical point of ambiguity. It is unclear whether a vehicle that meets the mileage requirement (below 5,000 kilometers) and falls within the acceptable model year range, but has already been sold or rented once, should still be classified as a new vehicle or as a used vehicle.
Potential Recommendations Or Revisions
Stew: From the business community’s point of view, are there potential recommendations or revisions that would improve the impacts of the regulation on the market?
Makara: If such vehicles are still classified as new, this would be a welcome step and a strong signal of support for formal and long-term investment in Cambodia’s automotive sector.
However, if they are classified as used vehicles, the current regulatory gap would remain. Unauthorised importers could continue to benefit by importing near-new vehicles under the “used” category, thereby undermining the exclusivity rights of authorised distributors and discouraging long-term investment.
In such a case, from an industry perspective, we would recommend that the Ministry of Commerce reconsider the third criterion. Specifically, the condition stating that a vehicle “shall never have been previously sold or rented” should be removed from the definition of a new vehicle.
Instead, the definition should rely primarily on objective and verifiable criteria, namely:
- mileage (not exceeding 5,000 kilometers), and
- model year (N, N–1, or N+1).
This approach would provide greater regulatory clarity, close existing loopholes, and better protect authorised distributors. Ultimately, it would strengthen investor confidence and support the sustainable development of Cambodia’s automotive industry.
