• Monday, Oct 18, 2021
  • Last Update : 05:42 pm

Barvida presses for stability in reconditioned car industry

  • Published at 04:43 pm April 28th, 2021
Barvida press briefing
Top officials of Bangladesh Reconditioned Vehicles Importers and Dealers Association (Barvida) address the media at a virtual briefing on Wednesday, April 28, 2021 Courtesy

Its president claims that local affluent buys vehicles from Singapore, Australia and Canada

The country needs a policy so that the local automotive manufacturing industry is established to guarantee stability in the business of importing reconditioned vehicles, said Bangladesh Reconditioned Vehicles Importers and Dealers Association (Barvida) on Wednesday.

They also said that it is very important to reduce the discrimination in tariff in import of reconditioned cars and new ones for a greater interest of the market expansion of the cars in the country, according to a press release they issued on the day.

The government can collect a lot of revenue from the higher sales of cars among the rising middle-income consumers as Bangladesh is set to graduate into a developing nation from the list of least developed countries (LDC), said Abdul Haque, the Barvida president.

He lauded the government's initiative to formulate an Automotive Industrial Development Policy 2020, which will usher in Made-in-Bangladesh branded vehicles in the market.

But before doing so, the Barvida leaders said that it was very important to consider the current situation of the industry concerned, the experiences of other countries and realities of the country.

Barvida also suggested the government to assess the impacts and effectiveness of automotive industrial policy by an independent agency.

The environment friendly cars produced in Japan with resale value are the first choice by the local customers, they mentioned.

As a result, Barvida leaders were sceptical whether the new vehicle manufacturing plants in the country will be a step in the wrong direction or not.

Abdul Haque cited a Japan International Cooperation Agency (JICA) survey, which said that it is feasible to establish the country’s own car making plant, if 100,000 vehicles are sold in the domestic market annually in Bangladesh.

However, in Bangladesh some 10,000-20,000 unit of cars are sold in a year.

So, the government needs to take measures to expand the local car markets before going for local production and aiming to export locally-produced cars

In this case, it is very urgent to remove the discrimination of tariff structures on import of reconditioned cars and locally produced cars, they observed.

In a recent meeting with the National Board of Revenue (NBR) officials, Barvida demanded increasing the depreciation benefit in import of cars by restructuring the supplementary duties on import of hybrid and fossil fuel driven cars and withdrawal of supplementary duty on import of microbuses.

Regarding an increase in depreciation benefit, Barvida said currently the yearly depreciation is given deducting the local tax (GST) in Japan and commission received by all kinds of dealers from all kinds of models of cars mentioned in the yellow books, which is not the case in Bangladesh.

Barvida mentioned that as per the import policy, enjoying five years’ depreciation benefit is a basic right by the importers.

'The rich purchase their vehicles from abroad'

At the press conference, the Barvida leaders also said the import of reconditioned cars declined significantly over the last few years in Bangladesh because of a wide discrimination of duty between on import of reconditioned and new cars.

"Bangladesh's rich people go to Canada, Australia and Singapore to buy expensive cars, because, in our country we have to pay 800% duty and tax," said Abdul Haque.

If tariffs and taxes are reduced, the sale of expensive cars in the country will increase. Middle income people can also buy cars. This will increase the car market in the country, while the government's revenue will also increase, he added.

Mohammad Shahidul Islam, secretary general and Mohd. Saiful Islam (Samrat), vice president of Barvida, also spoke on the occasion.

Joint Secretary General Mohammad Mokhlesur Rahman, Vice President Md. Jashim Uddin Mintu and Executive Committee Members Abu Hossain Bhuiyan (Ranu) and Md. Yunus Ali were also present.

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