Sales of used cars on rise

Despite the ongoing economic volatility, the sale of reconditioned cars has slightly increased in the first three quarters of the current fiscal year compared to the corresponding period of the previous fiscal year.

According to the Bangladesh Reconditioned Vehicles Importers and Dealers Association (BARVIDA), 14,387 cars have been imported in the first three quarters of the FY23, a 3 per cent increase compared to the same period of FY22 when 14,004 cars were imported.

Zahid Ahmed, an employee at a multinational company, was looking for a second hand sedan car at Tejgaon industrial area on Tuesday. He had already visited two car showrooms at Lalmatia and Dhanmondi, but sellers demanded excessive prices for second hand cars.

“I have a budget of Tk 13 lakh, but the sellers are now demanding more for a Corolla G second hand car. Maybe, I would have to buy a cheaper car that I can afford,” he said.

Ahmad Ullah, proprietor of second hand car selling showroom AD Car Choice in Tejgaon industrial area, said that they are getting an increased number of buyers for the last few months.

“That does not mean that we are making extra profit right now, because the maintenance cost has increased a lot due to the devaluation of taka against dollar. The prices of the car parts have increased resulting in increased prices of cars,” he added.

“Now we have to sell Corolla G at Tk 16-17 lakh which previously was sold for Tk 12 lakh. Earlier, we had to spend Tk 40,000 for an engine of the car, but now its price is about Tk 120,000. Actually, we are compromising our profit to survive in the business,” Ahmad claimed.

Second hand car sellers from Dhanmondi, Mohammadpur and Mirpur areas in the capital also expressed the same opinion.

BARVIDA members said over 8,000 cars were imported in last three months of previous FY. But in the current fiscal year, it is unlikely to happen again. So, the total import will register a negative growth at the end of the fiscal year, they apprehended. President of BARVIDA Habib Ullah Dawn said car import situation is worsening gradually during the last six months. Only a few cars are coming this month (May).

Asked about the increase in car import during the first three quarters of the current FY, he said, “The number of imported car is not supposed to be that much. Importing car is not an easy task now. I would inform you in details after verifying the data.”

He, however, was not available later for further comment.

The unpredictable car selling market

Ridwanul Haque, sales executive of car showroom Smart Imports at Tejgaon, said that they can deliver Toyota cars within three months of placing the order.

But several traders said due to the devaluation of taka against dollar and the ongoing Ukraine-Russia war, they are having a tough time to receive the imported cars. And almost all the supply is getting delayed for one or two months.

Abdur Rahman, deputy general manager of Executive Motors, the local dealer of Germany-based BMW brand, said that after a 100% cash margin was imposed on opening letters of credit (LCs) for car imports in July last year, it became difficult to open new LCs.

“The import of all the vehicles is currently getting delayed for a month or two which ultimately is affecting our relation with the customers,” he added.

Assembled car also in demand

Md Ehsan Ahmed, manager (sales and digital marketing) of PHP Automobiles Ltd, local partner of the Malaysia’s Proton Holdings Berhad (popularly known as Proton), said, “An increasing number of customers are now becoming interested to locally assembled car. At present, we are assembling cars in two manufacturing plants, in Dhaka and Chattogram, in the country. The sales of the cars have doubled in the last year.”

Informing that PHP Group first started assembling cars in its Chattogram plant since March 2015, he said, “We are going to establish two more plants in the country in the near future. Along with sedan (Proton Saga), seven seated family car is on a good demand right now.”

Meanwhile, the factory of a joint venture between Fair Technology and South Korean brand Hyundai came into operation at the Bangabandhu Hi-Tech Park from January this year.

Executive Motors also wanted to start assembling BMW locally, but the company backtracked from the decision after feasibility test.

DGM of Executive Motors Abdur Rahman said may be the market needs to grow more.

Both the officials said that along with the demand trust towards locally made product needed to be developed among the clients. Otherwise sustainability of the production will remain in question and going to manufacturing from assembling will never be possible.