POST TIME: 24 March, 2019 01:01:56 AM
Car sales in fast lane

Car sales in fast lane

The country’s car market has witnessed a rapid growth in the last several years thanks to rapid economic growth and a rise in the purchasing power of consumers.

“As the flow of money has increased in the hands of a certain group of people in recent times, there has been a significant rise in the purchase rate of cars over the last few years,” said Habib Ullah Dawn, president of the Bangladesh Reconditioned Vehicles Importers' and Dealers' Association (Barvida).    

The country imported around 23,000 cars last year to fulfill the growing public demand, he added.

Currently, the market size for reconditioned cars is around Tk. 3,750 crore. The size of the market is increasing by 4 per cent every year, according to Barvida.

“Most of the buyers are taking out bank loans to get their cars,” said Dawn.  

“Generally, a bank pays 50 per cent of the car’s price and sets the condition that the car would be registered under the bank’s name. I think that bank should provide up to 75 per cent of the total cost of the car,” he added.

“Around 63 cars are sold in Bangladesh every day now—the highest in the country’s history. The number of imported cars has increased threefold since FY2012-13,” said AKM Tawhidur Rahman, head of the sales division of Rancon Motors bikes limited.  

“ As much as 70 per cent brand new cars are being sold in Dhaka alone, 20 per cent in Chattogram and  10 per cent in other parts of the country,” he added.

Lack of standard public transport in Dhaka and affordable prices of cars are also reasons for the boost in the purchase rate of cars, according to car importers.

The numbe road reconditioned vehicles was 7,353 in FY13, 14,427 in FY14, 17,055 in FY15, 19,467 in FY16, and 20,149 in FY17, respectively, according to the BARVIDA.

The Independent talked to officials of several automakers and local distributors in this regard. They are taking part in a four-day auto show, organised by the CEMS Bangladesh in association with the CEMS Global, in International Convention City Bashundhara of the capital.

These officials said the automobile sector in Bangladesh was thriving alongside economic growth.  

A total of 265 exhibitors from 16 countries such as Bangladesh, Germany, Italy, France, the US, Japan, China, India and Malaysia are showcasing their products and services in more than 580 booths in the auto show. Mitsubishi Motors, Tata Motors, Subaru, Suzuki India, and Honda have been showcasing new models at the country's largest auto show.   

Khaan M Sakib Us Salehin, deputy general manager of the sales division of Uttara Motors, the sole distributor of Suzuki Indi, said that the people who liked to travel smoothly preferred the Indian Suzuki cars as they had low fuel efficiency and maintenance cost.

He said the current market size of reconditioned cars and brand new cars is 25,000 units, in which 5000 units are brand new. “However, we have sold around 1,000 units of cars yearly,” he added.

He also said that their sales growth was 20 to 25 per cent over the last five years, while their annual growth target was 30 per cent.

In the auto show, Uttara Motors have showcased Suzuki's brand new 1,500cc hybrid cars with automatic transmission within the range of Tk. 22 lakh to Tk. 24 lakh.

Salehin said they were now offering three years' after-sales service warranty to customers and arranging bank loans for them.

Oahidur Rahman, deputy manager of Energypac, said they had sold 150 units of cars last year. “Our sales growth is very high. It is increasing every year,” he added.

Reyad Hasnain, managing director of Subaru Bangladesh, expressed hope the exhibition would help introduce the Japanese brand Subaru to the country. “As Subaru emphasises safety for passengers, it will be able to grab a significant share of the automobile market,” he added.

The distributor of Subaru Motors is showcasing four new models: Forester, BRZ, Impreza, and XV.

Al-Mamun, deputy manager of the sales division of the distributor of Mitsubishi Motors, said they were displaying two new models in the show. And they have sold 1,500 units of cars yearly.

The models Eclipse Cross and Mitsubishi Xpander have a capacity of 1,500cc and are priced at Tk. 43 lakh and Tk. 32 lakh respectively.

Abdul Matlub Ahmad, chairman of the Nitol Niloy Group, the sole distributor of Indian automobile giant Tata Motors, said Indian automobile manufacturers captured the commercial vehicle segment with reliability. He was also optimistic about the passenger vehicle segment of Indian cars.

If the government formulates a policy for establishing four-wheeler-manufacturing plants, prices will ultimately come down and the market will boom, he noted.       

Motorcycle sales have also risen by nearly 25 per cent on a year-on-year basis to 4 lakh units in 2018, after the government lowered the supplementary duty on imported parts and components of two-wheelers from 25 per cent to 20 per cent.

Shams, marketing manager of Rancon Motorbikes, told The Independent that just 2.40 lakh units of motorcycles were sold in 2012, but this figure went up to approximately four lakh units in 2018.

“We expect this to reach around 4.5 lakh units at the end of 2019,” Shams predicted.

Explaining the reasons behind this boom, Shams said to encourage an emerging motorcycle assembly and manufacturing industry, the government has lowered the supplementary duty on completely knocked down (CKD) units of motorcycles from 25 per cent to 20 per cent. This has helped motorcycle assemblers to backward-integrate more easily, he added.

Rancon Motorbikes is exhibiting the apparitional cruiser bike of the Japanese automobile giant Suzuki at the Dhaka Bike Show.  In the show, Suzuki exhibited the Boulevard M1800, latest trio Suzuki flagships— Hayate 110, Suzuki Bargeman Street 125 and Suzuki GSXR 150.

Shams said Rancon motorbikes had been operating in Bangladesh for the past five years.

Yamaha has come up with many attractive arrangements and bike-lovers could enjoy the touch and feel of the company's new models.

Jahidul Islam, brand manager of Yamaha, said they captured 5 per cent of the country's total bike market. They have sold 20,000 units of bikes across the country in one month, he added.

“We basically manufactured the bikes focusing on the customer’s interest or choice. So, the growth of the Yamaha bike selling is increasing rapidly," he observed.

Rafiqul Islam, regional sales manager of Navana Moto, said they were distributing two models—Keeway and Benelli motorcycles—from January this year. They are expecting to 30,000 units of bike sales in the current year.

The size of the automotive battery market reached more than Tk. 6,000 crore last year. It is still growing. The popularity of battery-run rickshaws and easy bikes, hybrid and electric cars, in particular, has gone up in the past five years.

The market size is increasing at an average growth of nearly 20–25 per cent since 2013. This can be attributed to the popularity of easy bikes and battery-run rickshaws, said industry insiders.

Md Nazibur, an official of the SAJ Engineering and Trading Company, said they sold their products  in least 40 district across the country.  They showcased bearing, tyres and filters in the expo.