Photo : Messenger
The depreciation of the Taka against the dollar, coupled with high inflation and persistent economic instability, has significantly impacted private car sales in the country. The data reveals a stark decline, with private car sales plummeting by 35 percent in 2023 compared to the previous year, marking the lowest figures in a decade.
According to Bangladesh Road Transport Authority (BRTA) data, 10,784 private vehicles were registered in 2023, compared to 16,695 in 2022. That is, the sales of cars have decreased 5,911 or by 35.40 percent in one year. Industry insiders said that BRTA’s registration statistics provide accurate information on vehicle sales, as no vehicle is allowed on the road without registration.
Stakeholders have noted that the present economic conditions, along with prolonged high inflation, have created an unfavorable environment for middle-income earners. These economic challenges are dissuading them from making significant purchases, such as buying a car. Consequently, the buying behavior of those who were initially inclined to purchase a car has also undergone a noticeable shift.
Arif Khan Bipu, the Managing Director of Motors Bay Limited, a Japanese reconditioned car importer and retailer, stated to The Daily Messenger that the primary factors contributing to the decline in car sales are the rise in car prices and the unstable economic conditions.
He explained that the price of the US dollar has surged by approximately 26 percent in the last 18 months, and the subsequent rise in import duties has led to a minimum 10 percent increase in car prices over the past year. Consequently, these price hikes have rendered these cars unaffordable for middle-class customers.
He also said that the country’s market is usually dominated by low-priced cars, as people are more interested in buying cheap reconditioned Japanese cars. Besides, importers are not able to bring in vehicles as per demand, as opening letters of credit (LCs) require 100 percent margin and banks are cautious about opening LCs.
Habib Ullah Dawn, president of Bangladesh Reconditioned Vehicles Importers and Dealers Association (BARVIDA) and managing director of Auto Museum Limited, told The Daily Messenger that car sales have decreased due to the country’s economic instability and political unrest. Also, because of the dollar crunch, there is a problem in opening LCs. Because of this, the import of cars has decreased by about 65 percent.
According to him, few people have bought cars in the last six months due to political unrest including strikes and blockades. He said that under normal circumstances he used to sell at least 70 cars every month. But, last year managed to sell an average of 20 cars per month. He also said that he has not faced such a difficult situation in the last 34 years in the car business.
Abdul Haque, managing director of Haque’s Bay Automobiles Limited, also blamed the ongoing economic and foreign exchange crisis for the drop in car sales. According to him, people are struggling with high inflation, so they are not in a position to spend on luxuries like cars. He believes that car sales will increase if the economy stabilises.
Messenger/Fardin
