Isuzu Motors could be set for a return to Myanmar (Burma) with plans to take a 60% stake in a local truck maker as early as the current financial year, the Nikkei reported.

Myanmar, which has a population of around 62m, about the same as Thailand, started to take steps towards democracy earlier this year and is seen as having the potential to be another key south-east Asian market with demand for new vehicles estimated at around 800,000 units a year. As spending increases on infrastructure projects, small trucks and pickups are expected to be in considerable demand.

According to the Nikkei, Isuzu will start assembling pickups and small trucks at a state-affiliated factory in Yangon, shipping parts from Thailand where Isuzu has its largest Asian production site outside Japan. The initial annual output target is 1,000 units.

The Nikkei noted that Japanese convenience store chains were already beginning to establish themselves in Myanmar where Isuzu and Suzuki both had assembly operations in the late 1990s.

Sanctions against the country’s military rulers led to a suspension of operations but Suzuki is now considering a resumption of motorcycle and car production while other truck makers, including Hino and Mitsubishi, are also reported to be considering a move into Myanmar. Assembling locally avoids Myanmar’s restrictions on imports.

Tata Motors has already started local production.

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Assembly line workers in Yangon are paid about US$68  a month, or a quarter of their counterparts in China and Thailand, according to the Japan External Trade Organisation quoted by the Nikkei.