New car imports are increasing, old cars are decreasing

New car imports are increasing, old cars are decreasing

New car imports rose 12 percent to 16 percent in five fiscal years. Imports of used cars fell by 12 percent to 62 percent.

Japan still has the highest number of reconditioned or used cars in the country. Traders are importing such cars as there is demand. However, this trend is slowly changing. Because, as a result of the development of the middle class in the country, the import of new cars is increasing day by day. As a result, the import of old cars is gradually declining.

The increase or decrease in car imports depends on the demand of the buyers. The traders said that they are importing more used and old cars as there is demand. But now the country has also created buyers for new cars. Meanwhile, the investment of local and foreign entrepreneurs in the car assembly industry has been increasing lately to capture the new car market.

Cars are imported mainly through Chittagong and Mongla ports. Reviewing the data of the last five financial years of the two ports, it has been found that the import of new vehicles has increased and the import of old vehicles has decreased. For example, in the 2015-16 financial year, about 35,000 cars were imported through the two ports. Only 6 percent of them were new cars, the remaining 94 percent were old or unused cars. The number of new car imports has increased over the next five years. In contrast, the import of old cars has decreased. In the fiscal year 2019-20, a total of 24,000 vehicles were imported into the country. Of these, 18 percent were new cars, and 72 percent were old cars.

Mohammed Shahidul Islam, secretary-general of the Bangladesh Reconditioned Vehicle Importers and Dealers Association (BARVIDA), an association of car dealers, told Prothom Alo that, “The share of used cars in Japan is still high. However, the market for used cars is now 80 percent. The main reason for the decline in demand for used cars is the tariff inequality of old cars with new cars. We demand an end to this inequality.”

"The price gap between new and old cars of the same model has come down. Buyers are getting a warranty facility on the new car. Again there is a demand for new vehicles for many development projects in the country. For these reasons, the new car market is slowly growing."

Nasimul Gani
AGM, Navana Limited

Talking to traders, it is learned that most of the old cars are sold to the private sector. And the price of old car is increasing every year. This is affecting the market. In other words, the price gap between new and old cars is decreasing. As a result, buyers are naturally leaning towards new cars.

 

On the other hand, the lion’s share of new cars are bought by government agencies, multinational companies, non-governmental organizations (NGOs), banks, and corporates. Most of the cars are sold to big government and non-government companies. New car buyers are also emerging in the private sector. Because the development of the middle class is happening day by day in the country. As a result, new car sales are increasing.

 

"The main reason for the decline in demand for used cars is the tariff inequality of old cars with new cars. We have demanded the elimination of this inequality."

Mohammed Shahidul Islam
Secretary-General, Barvida

Due to Corona, the government has decided not to buy cars for various government, semi-government and autonomous organizations in the current fiscal year 2020-21. However, the distributors of the new cars consider it as temporary.

Nasimul Gani, Assistant General Manager (AGM) of Navana Limited, a distributor of Toyota brand new cars in Japan, told Prothom Alo that the price gap between new and old cars of the same model has come down. Buyers are getting a warranty facility on the new car. Again there is a demand for new vehicles for many.

New Source: Prothom Alo 

 

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