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Reconditioned car imports slump by 31%

  • Published at 10:17 pm December 14th, 2019
WEB_  reconditioned cars in port
File Photo: Lines of imported reconditined cars sitting at a port customs Syed Zakir Hossain/ Dhaka Tribune

BARVIDA demands new tariff policy to save the sector

Imports of reconditioned vehicles fell by 31% in the first five months of the current fiscal (FY2019-20) compared to the corresponding period of the previous fiscal due to the new tariff policy of the National Board of Revenue (NBR).

Bangladesh Reconditioned Vehicles Importers and Dealers Association (BARVIDA) President Abdul Haque said this at a press conference in the capital on Saturday. 

"The NBR is determining the prices of reconditioned vehicles in such way that the vehicles' prices surpass those of new ones in many cases," he said, adding that as a result, the sales of the reconditioned cars and imports were falling sharply.

The association’s Vice-Presidents SM Anwar Sadat, Md Saiful Islam and Md Jashim Uddin, Secretary General Md Shahidul Islam and other office bearers were present at the program. 

“Now, in a month, we sell just half of what we used to sell two years ago,” said the BARVIDA president, adding that recondition car businesses was in crisis.

The government reduced maximum depreciation facility on the import of five-year-old reconditioned vehicles from 45% to 35% in FY2018-19, which made the difference of new and reconditioned car prices insignificant, he said. 

Besides, the customs fixed the prices of cars less than five-year old very high irrationally while the importers were allowed to declared the prices of their new cars, he told the program.

Haque said that in such situation, people were turning away from buying cars, causing a revenue loss to the government. 

According to the NBR data, 3,438 units of reconditioned vehicles were imported in July-November of FY2019-20, down by 31.34% from 5,007 units in the same period of the previous year. 

The reconditioned car imports fell to only 12,502 units in FY2018-19, which was 23,075 units in FY2017-18, the data showed.

The government earned Tk1,456.11 crore in FY2018-19, a Tk9,852 crore less than previous year, the NBR data said.

Haque said many recondition car importers and entrepreneurs of the sector, counting losses due to the high prices of the vehicles, were being forced to leave their businesses. 

The BARVIDA president urged the government to formulate a complete policy for the entire vehicle sector, ensuring a level-playing field for all. 

According to the association, currently some 850 importers and dealers, with approximate Tk20,000crore investment, are involved with the recondition car business, who supply about 85% of the total vehicles in the country.