Friday, September 22, 2023

Import of used cars slips while more new cars come in

Import of used cars from Japan posted a sharp decline in fiscal year 2010-2011 from that of the previous two years.
Importers said the reasons for the drastic fall in used car import included increased import duty, scarcity of used cars in Japan after the devastating tsunami hit the country in March, and devaluation of taka against Japanese yen.
According to the statistics provided by the Bangladesh Reconditioned Vehicles Importers’ Association, the country imported around 20,178 used cars from Japan in FY2011, compared to 32,225 cars imported in FY2010 and 33,178 in FY2009.
On the other hand, import of new cars increased much in FY2011 from that in the previous fiscal year, said sources at the BARVIDA and new car importers.
According to the BARVIDA data, the country imported around 36,001 new cars in the first 10 months of FY 2011, while the data received from the Chittagong and Mongla ports shows some 2,568 new cars were imported in FY2010 and 2,442 in FY2009.
The government in the last fiscal year raised the supplementary duty by 25 per cent on import of vehicles below 2000CC and by 50 per cent on import of vehicles with engine capacity above that level.
BARVIDA secretary Abdul Hamid Sharif said the used car import dropped by nearly 38 per cent in the last fiscal year from that of FY2009 due mainly to imposition of higher duties by the government.
Sharif also said the prices of cars, especially of those with more than 1500CC engine capacity, had increased by around Tk 500,000 per unit on average following the duty hike in the budget of FY2011.
Although 25 per cent duty is commonly imposed on import of both new and used cars, incredibly, the assessable value of a new car stood at less than half of that of a used car, because importers show the price of a new car at lower than that of a used one through under-invoicing, said the BARVIDA secretary.
For instance, in the last fiscal year, the assessable value of a new 1500CC sedan car stood at $8,270 while that of a used car of the same features stood at $17,550 at customs, Sharif said. ‘For this reason, the import of new cars, especially those imported from India, has been increasing gradually.’
He also identified the government’s previous decision of reducing the age limit of importable used cars from six years to four years as one of the causes of declining used car import.
Moreover, in the current budget, the National Board of Revenue has further reduced the age limit of used cars from four years to three years to encourage import of new cars.
He said that not only Bangladesh but 180 countries of the world including the UK, Russia, New Zealand, Canada, and Australia were importing Japanese used cars irrespective of age limit.
Sharif claimed Japanese used cars could last as long as 20 years but the durability of cars imported from other countries including India was less than three years.
He alleged that certain quarters were misguiding the government to encourage import of new cars instead of used ones.
According to the BARVIDA, the price of 30,000 used cars, the average annual demand of the country, was $24 crore while the price of the same number of new cars imported from India would cost $60 crore.
In FY2008, some 23,000 cars were sold in the country. Around 80 per cent of them were sold in the capital, BARVIDA sources said.

-With New Age input

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