Car trade revs up

Car trade is taking a U-turn after surviving the blow of coronavirus. Though car sales stopped abruptly during the initial few months of the corona outbreak, it has almost normalised now. Private car sales are thriving as can easily be assessed from the inordinate traffic jams on the streets of the capital.

During the prevalence of the pandemic, in 2020, 2021 and the first two months of the current year, a total of 31,575 private cars were brought out on the road. Bangladesh Road Transport Authority (BRTA) issued licences to more than 1,200 new cars every month.

According to BARVIDA, the Bangladesh Reconditioned Vehicle Importers and Dealers Association, no cars were imported in the country in between January to July of 2020. After that in the last 19 months a total of 23,218 cars were brought in. Brand new cars along with reconditioned ones came in at the time.

BARVIDA sources said that out of all the reconditioned cars that are imported, 80 per cent are sold. The remaining 20 per cent remain in the showrooms.

Brand new and reconditioned cars are sold in the country. But, middle and upper middle class people prefer reconditioned cars. Reconditioned cars take up about 75 per cent of the car market.

Reconditioned cars arrive in Bangladesh after running on Japanese streets for one to five years. They dominate the market as they come cheaper than brand new cars. But, for the last couple of years buyers have shown interest in brand new cars as well.

Car sellers have revealed that their trade has been booming for the last six to seven months. Customs tariff was reduced in the latest budget and this has contributed to boosting their business. Besides, owing to the corona crisis, there were almost no sales of cars for a long period. So now with the corona scare subsiding, many are changing their old cars or buying new ones.

Haq’s Bay Automobiles Ltd in Dhaka city has been running car business in the country for almost 50 years now. For the last five to six months, on an average 30 cars were sold each month from their showroom in Nayapaltan. Small and medium sized showrooms on the Kuril-Bishwa Road are selling five to ten cars monthly.

In the first seven months of 2020 not even a single car was imported

BARVIDA president Abdul Haque, speaking to Prothom Alo, said car sales are reviving. In the first year of the corona pandemic there were no car sales. Tariff on hybrid vehicles and microbuses has been reduced in the budget and this has contributed to an increase in sales.

During the pandemic many companies stopped purchases including of cars. Now they have resumed buying cars. Government agencies are buying cars too. As a result, car import has boomed more than threefold, he added.

Reconditioned Toyota cars of Japan are imported usually. Most of the imported cars are Toyota Allion, Premio and Fielder. Apart from that, SUV cars of various brands including Honda are imported too.

In the first seven months of 2020 not even a single car was imported. In the next five months of the year 4,541 cars were imported.In 2021, in all 15,909 cars were imported. According to that record, import of reconditioned cars has more than tripled. Prior to corona pandemic 16 to 17 thousands cars used to be imported each year.

Sales of new cars have increased as well. Cars of different brands including Honda, Mitsubishi, Hyundai, Suzuki, Tata and Mahindra are sold in the country. It was found that 3,000 new cars were sold in 2021.

FBCCI vice-president Md Habib Ullah is associated with sales of new as well as old cars. He said that there has been a crisis of computerised chips in Japan and other European countries that produce cars. So, new cars are not being supplied as per the demand. Besides, the price of new cars has gone up by two to ten thousand dollars in those countries.

He added, after Covid the trade of new cars have turned around as well. However, the business has been disrupted slightly due to supply crisis.

The demand of reconditioned cars has gone up in Japanese market as well due to a decrease in incomes. People are more inclined towards buying reconditioned ones instead of new cars

Instability in Japanese market

Meanwhile, the reconditioned car market in Japan is facing instability. For the last few months auction of reconditioned cars in Japan has reduced. Talking to businessmen it was found that there has been a crisis of automobile parts of new cars due to corona pandemic.

Japanese brands have decreased the production of new cars. Besides, the demand of reconditioned cars has gone up in Japanese market as well due to a decrease in incomes. People are more inclined towards buying reconditioned ones instead of new cars.

For these reasons, prices of reconditioned cars, which are imported by countries like Bangladesh, have risen by 10 to 20 per cent. Especially, there isn’t enough supply of models like Premio and Allion of Toyota Brand.

It was learned through BARVIDA sources that only 250 cars arrived on a vessel recently. These vessels used to carry at least a thousand cars earlier.

* This report appeared in the print and online edition of Prothom Alo and has been rewritten for the English edition by Nourin Ahmed Monisha