Demand for reconditioned cars has been increasing gradually in the country due to rising purchasing power of the people, particularly middle class, relaxed car loan policy and taka appreciation against the greenback.
In fiscal year (FY) 2012-13, importers brought in 7,353 units of used vehicles, a jump of more than 100% a year earlier, according to data provided by Bangladesh Reconditioned Vehicles Importers and Dealers Association (BARVIDA).
According to Bangladesh Road Transport Authority, the number of registered motor vehicles in 2013 stood at 10,472, a rise of more than 13% over the previous year when the figure was 9,224.
As of September this year, the figure was 11,541.
“The imported reconditioned car sales have increased due to relaxed of car loan policy. A large number of buyers are middle class people,” said BARVIDA President Habib Ullah Dawn.
The car price fell substantially due to relaxed depreciation rules for cars formulated in FY2013-14, he said.
Abdul Haq, managing director of Haq’s Bay Limited, said car sales have increased manifold recently, as prices have fallen down significantly.
For example, a Toyota Axio brand is now being sold at Tk17lakh, which was Tk22 lakh earlier because of depreciation in value that has also resulted in lowering duty, he said.
Mid-income people preferred to purchase at prices ranging from Tk15lakh and Tk20lakh, he said.
He said appreciation of local currency against dollar and yen resulted in lower prices of vehicles that went to an affordable range of the people.
The banks are now providing 50% of a vehicle’s value or Tk40 lakh as loan which was earlier 30% or Tk20 lakh, stimulating purchase of the vehicles.
As per the budget for FY2014, 45% depreciation has been proposed for 2008-09 model 1500cc cars while for 2010 model the depreciation is 40%, for 2011 model 35% and 2012 model 30%. Earlier, the depreciation was 35% for all such cars.
Bangladesh imports reconditioned cars mainly from Japan where only Toyota has nearly 75% share in the market. The reconditioned cars account for 90% of all motor cars while the rest 10% are brand new cars, according to importers.