Pandemic wreaks havoc in car sales
Passenger vehicle revenue fell by around 26 % in 2020 compared to the previous year due to the ongoing coronavirus pandemic and imposition of additional highway tax.
Passenger car product sales were in its lowest in the past seven years as a total of 12,403 devices were sold in 2020 while it was 14,681 devices in 2014.
Sales started rising found in 2014 and continued to improve until 2019, according to info from the Bangladesh Road Transport Authority (BRTA).
However, the Covid-19 fallout and imposition of additional road tax negatively damaged the industry, market players said. The federal government made a decision to increase advanced tax, often called road tax, by 67 per cent for the current fiscal year.
The amount must be paid when seeking the registration and fitness renewal for private motor vehicles.
Until the previous fiscal, the owners of cars or jeeps with up to at least one 1,500cc engine capacity had to shell out Tk 15,000 as road tax while people that have up to 2,000cc engine capacity paid Tk 30,000.
The costs of taxes for these cars risen to Tk 25,000 and Tk 50,000 respectively in today's fiscal.
Meanwhile, a car or jeep with an engine capability of 2,000-2,500cc now must pay 50 % more at Tk 75,000.
Very similar vehicles with an engine capacity of 2,500-3,500cc must pay twenty five percent more.
"Car importers passed a terrible year in 2020 due to the monetary impact of Covid-19 despite the fact that sales were slightly improved," stated Mohammed Shahidul Islam, secretary-general of the Bangladesh Reconditioned Cars Importers and Dealers Association (Barvida) and chairman of HNS Group.
Besides, since car rates increased in Japan concurrently, it will have an impact on the neighborhood market in the approaching days.
"Thus, we will demand to the federal government to restructure the customs duty to greatly help the business enterprise survive," Islam said, adding that the market continues to be unpredictable amid the existing crisis.
Car sales came down to 1,033 units monthly in the united states in 2020 although it was around 1,398 monthly the previous yr, according to Abdul Haque, president of the Barvida.
"This implies our sales quantity fell by about 26 % compared to normal occasions," he said.
Customers avoided shelling out for costly items amid the ongoing economical uncertainty and autos were no exception.
Besides, the additional road tax also damaged the marketplace, Haque added.
In line with the Barvida chief, importers will be in deep issues as product sales have decreased considerably because of the faulty tax structure and decrease in depreciation rate.
Haque went on to say that the faulty duty framework for reconditioned automobiles has been set in a means that pushes the price for reconditioned cars over that of new ones.
He also alleged that the work composition is creating disparities between reconditioned and brand-new car importers.
Car sales attended down to 41 devices per day in 2020 although it was 56 units found in 2019 and 61 systems in 2018.
The federal government brought down the maximum depreciation on imported reconditioned vehicles from 45 % in fiscal 2015-16 to 35 per cent in 2018-19.
This increased the import duty and price of imported cars, Haque said, adding that there surely is no depreciation for one-year-old cars.
Because of the reduced depreciation price, the purchase price difference between reconditioned and brand-new cars is quite insignificant.
"Under these situations, all importers and sellers face difficulties to survive," Haque said.
Mannan Chowdhury Khasru, a good ex - president of Barvida and owner of Nippon Autos Trading, said he previously not witnessed such a good damage throughout his four-decade-long job in the sector.
Khasru as well believes that car sales came right down to its lowest within the last seven years as a result of Covid-19 fallout and extra road tax.
Besides, car prices found in Japan increased as japan currency gained durability against the US dollar.
"There is absolutely no scope to manipulate the purchase price as customs costs import duty in the price tag on the yellow e book," he said.
Khasru added that he already had to close two of his three showrooms in Dhaka because of continuous losses in 2020.