Car sales drop on polls worries
Car sales fell 16.5 percent to 18,227 units last year, the lowest in four years, as customers tightened their belts because of uncertainty surrounding the general election.
Some 21,959 units of cars were registered with Bangladesh Road Transport Authority (BRTA) in 2017. It was 20,304 and 21,062 units in 2016 and 2015 respectively.
In the last quarter of 2018, the sales declined roughly 25 percent compared to the remaining quarters of the year, said Mannan Chowdhury Khoshru, a former president of the Bangladesh Reconditioned Vehicles Importers and Dealers Association (Barvida).
“We had assumed that businesses would slow in 2018 as it was an election year, but the pace of decline was not expected,” he said.
In 2014, when the 10th parliamentary elections took place, 14,699 cars were registered with the BTRA, up from 10,472 units in 2013.
Mohammed Shahidul Islam, chairman of HNS, a major importer, says automobile importers and retailers normally experience slow growth in an election year.
“But it was different last year as the sector experienced a negative growth,” he said, adding that his firm faced a sales drop of almost 15 percent.
Islam is, however, hopeful that the sales would perk up this year on the back of stable political situation and normalcy in economic activities.
Habibullah Don, president of Barvida, says the businesses had anticipated a slowdown in the market in the election year. “So, we imported less number of cars last year.”
He said the sales of sedan and regular cars were slow in the year compared to 2017, but the sale of sports utility vehicles (SUVs) was better.
Registration of SUVs with the BRTA rose to 5,555 units in 2018 from 5,425 units a year ago.
Khoshru, also the chairman of Nippon Auto Trading, says the negative growth of car sales would affect small-scale automobile businesses.
“If the situation does not improve within the next six months, a number of businessmen will exit the sector,” he said, adding that a prolonged slowdown will also create problems for the financial sector.
Islam said deputy secretary-level government officials had bought a good number of mid-range cars in 2018 after the government made interest-free auto loans available to them, in a boost to the sector. Car importers deposited Tk 3,800 crore in import duties to the state coffer last year, up from Tk 3,700 crore a year ago, according to Don.
