High tariff, strong yen caused fewer shipments from Japan in July-October
The import volume of used or reconditioned Japanese cars has nosedived by more than 30 per cent in the first four months of the current fiscal year from that in the corresponding period of the last fiscal year.
According to car dealers, the sales volume of reconditioned cars, which account for more than 80 per cent of the country’s privately-owned automobiles, has posted a steep fall since the beginning of FY2010-11 as increased import duties and a stronger yen resulted in the prices of the cars shoot skyward.
An office-bearer of Bangladesh Reconditioned Vehicle Importers’ and Distributors’ Association quoted Japan’s official export statistics saying that 6,144 units of used cars had been shipped to Bangladesh between July and October this fiscal, compared to 8,788 units shipped in the same period of FY2009-10.
BARVIDA president Habibullah Don said the declining shipment volume of used cars from Japan to Bangladesh is a clear indication that fewer cars would be sold in the country this year.
The highly inflated tariff imposed on cars in the current national budget has caused the car prices to balloon, pushing them beyond the purchasing capacity of the middle class that comprises a large majority of the buyers of reconditioned cars.
On top of the increased duties, a stronger yen has also contributed significantly to the import cost hike of used and reconditioned cars from Japan in the recent months, the BARVIDA chief said.
A reconditioned unit of the popular 1300-CC Corolla, Alien or Premio models of Toyota now costs Tk 15 lakh, up from the range between Tk 9 lakh and Tk 11 lakh in the last fiscal year, he added.
Anwara Begum, chairman of Car House Limited, a leading dealer in reconditioned cars, said their sales had plummeted in the last few months primarily due to the price hike.
‘The severe traffic jams in the city may also have discouraged a section of potential buyers from making their dream of buying a car come true,’ she remarked.
Reconditioned car importers are one of the top three contributors of import duties to the exchequer, said the BARVIDA president. The government received more than Tk 3,000 crore in import duties from them in the last fiscal year, he mentioned and pointed out that ‘reduced imports and sales of reconditioned cars will definitely diminish the amount of tax collected by the government in this fiscal’.
BARVIDA now has more than 500 car importers as its members, who had been running a booming business in the last couple of years, taking both imports and sales of used and reconditioned cars to all-time-high levels. Easy access of executives and businessmen to car loans and the middle-class families’ demand for a car had brought about the sales boom.
