Reconditioned car import falls by 60pc
20pc importers roll back businesses
Reported by: AKM Moinuddin, UNB Staff Writer
Reported on: November 04, 2011 16:28 PM
Reported in: Business
Reported on: November 04, 2011 16:28 PM
Reported in: Business
Dhaka, Nov 4 (UNB) - The import of reconditioned cars has marked a sharp fall in the last seven months, forcing 20 percent importers to roll back their businesses.
“The import of reconditioned cars has dropped by 60 percent in the last seven months. Twenty percent importers have already shut down their businesses amid the dismal business scenario,” M Habib Ullah Dawn, one of the leading importers, told UNB on Friday.
Dawn, former president of Bangladesh Reconditioned Vehicles Importers and Dealers Association (Barvida), fears that about 50 percent car importers may quit the business if this trend continues.
He blamed the valuation discrimination between reconditioned and brand new imported cars, devaluation of money (higher dollar price), stronger Yen against dollar and increased import duty for the unfavorable business condition.
“It’s now clear that car prices have gone beyond the buyers’ purchasing capacity. We’re in continuous dialogue with the NBR (National Board of Revenue) and the Finance Minister to remove the discrimination,” Dawn, also the owner of Auto Museum Ltd, said.
He said they explained to Finance Minister AMA Muhith the price manipulation by the brand new car importers and how they evade import duties. “He has agreed with us and assured of looking into it seriously.”
Talking to UNB, Barvida vice-president M Habibur Rahman said, “We import 2000 cars every month on average but it comes down to 600 now showing about 60 percent drop in the import.”
He said brand new cars from China, Korea, India and other countries have flooded the market through price manipulation.
Sources at Chittagong Seaport said a vessel, ‘Asian Karat’, reached the port on Sunday with only 228 cars though its has the capacity to carry over 1500 cars. Another vessel, ‘Ocean Blue’, arrived at the port with only 363 cars though it has the capacity to carry over 2000 cars.
Shipping companies are also counting losses for the decline in car import.
Industry insiders said the brand new cars had 10 percent market share which has grown to 40 to 45 percent where imported reconditioned cars had 90 percent market share that has come down to 50 to 60 percent.
Meanwhile, the prices of imported reconditioned cars marked a slight rise on the local market due to short supply of used vehicles following the recent devastating earthquake and tsunami in Japan.
The prices of used cars had registered a rise earlier due to a rise in tax in the current fiscal year.
On the other hand, auctions for reconditioned cars, from where agents purchase for Bangladeshi buyers, are not held regularly due to the ongoing crisis in Japan, according to importers.
A record 8.9 earthquake and subsequent tsunami on February 11 broke the supply chain of the major reconditioned car export to Bangladesh.
Bangladesh usually imports about 40,000 reconditioned cars a year, and Japan controls 95 percent of the market.
Both new and used cars from Toyota, Honda, Nissan and Mitsubishi usually ply Bangladeshi roads. Of them, Toyota accounts for 75 percent of the country's growing market.
“The import of reconditioned cars has dropped by 60 percent in the last seven months. Twenty percent importers have already shut down their businesses amid the dismal business scenario,” M Habib Ullah Dawn, one of the leading importers, told UNB on Friday.
Dawn, former president of Bangladesh Reconditioned Vehicles Importers and Dealers Association (Barvida), fears that about 50 percent car importers may quit the business if this trend continues.
He blamed the valuation discrimination between reconditioned and brand new imported cars, devaluation of money (higher dollar price), stronger Yen against dollar and increased import duty for the unfavorable business condition.
“It’s now clear that car prices have gone beyond the buyers’ purchasing capacity. We’re in continuous dialogue with the NBR (National Board of Revenue) and the Finance Minister to remove the discrimination,” Dawn, also the owner of Auto Museum Ltd, said.
He said they explained to Finance Minister AMA Muhith the price manipulation by the brand new car importers and how they evade import duties. “He has agreed with us and assured of looking into it seriously.”
Talking to UNB, Barvida vice-president M Habibur Rahman said, “We import 2000 cars every month on average but it comes down to 600 now showing about 60 percent drop in the import.”
He said brand new cars from China, Korea, India and other countries have flooded the market through price manipulation.
Sources at Chittagong Seaport said a vessel, ‘Asian Karat’, reached the port on Sunday with only 228 cars though its has the capacity to carry over 1500 cars. Another vessel, ‘Ocean Blue’, arrived at the port with only 363 cars though it has the capacity to carry over 2000 cars.
Shipping companies are also counting losses for the decline in car import.
Industry insiders said the brand new cars had 10 percent market share which has grown to 40 to 45 percent where imported reconditioned cars had 90 percent market share that has come down to 50 to 60 percent.
Meanwhile, the prices of imported reconditioned cars marked a slight rise on the local market due to short supply of used vehicles following the recent devastating earthquake and tsunami in Japan.
The prices of used cars had registered a rise earlier due to a rise in tax in the current fiscal year.
On the other hand, auctions for reconditioned cars, from where agents purchase for Bangladeshi buyers, are not held regularly due to the ongoing crisis in Japan, according to importers.
A record 8.9 earthquake and subsequent tsunami on February 11 broke the supply chain of the major reconditioned car export to Bangladesh.
Bangladesh usually imports about 40,000 reconditioned cars a year, and Japan controls 95 percent of the market.
Both new and used cars from Toyota, Honda, Nissan and Mitsubishi usually ply Bangladeshi roads. Of them, Toyota accounts for 75 percent of the country's growing market.
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