Reconditioned car business passes thru tough time

The government has counted a loss of Tk 3,500 crore in revenue over the last two years as the country’s reconditioned car business passed through dull days mainly due to an unfavorable government policy making it difficult for the sector to stay afloat.“We’re really frustrated. Once we used to import 30,000 cars annually which have come down to below 9000 now,” M Habib Ullah Dawn, one of the leading importers, told UNB on Sunday.
Dawn, the new president of Bangladesh Reconditioned Vehicles Importers and Dealers Association (Barvida), said though the Finance Minister could understand the situation, they did not get any support from the National Board of Revenue (NBR) to ensure a smooth car business.
Former Barvida vice-president M Habibur Rahman also expressed concern over the slump in the car business and ascertained some reasons why the sector has suffered the setback.
He said the people belonging to the middle-income group mainly buy reconditioned cars, but one cannot afford it without bank loan.
“Once there was a bank loan facility up to 90 percent of the total amount. Now it is only 30 percent as the buyer has to pay the remaining 70 percent in cash,” Rahman explained.
He also said discrimination regarding duty structure with the new car importers is the biggest hurdle for which the reconditioned car business is experiencing the tough situation.
“We want a level playing field. What we see now isn’t a level playing field…it is 100 percent in favour of new car importers,” Rahman, the Owner of the Four Wheelers, said.
Responding to a question, Habib Ullah Dawn said they would soon meet new NBR chairman M Ghulam Hossain and convey him their proposals to ensure a better business and help them pay more revenues.
Describing the present situation, Dawn said the import of reconditioned cars has marked a sharp fall over the last two years, forcing 30 percent importers to roll back their businesses.
If the situation does not improve, he said, about 50 percent car importers may quit the business.
About the pre-budget discussion with the Finance Minister, he said, “It’s like having chat over tea. Our demands have so far gone unheeded as so many associations used to be there together.”
On the sliding car import, Habibur Rahman said, “The car import in every month on average comes down to 600 now, showing about a 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.
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.
Bangladesh usually imports used cars from Japan which is about 95 percent of total import a year.
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. UNB

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