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19 October, 2018 00:00 00 AM
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Cut in depreciation facility

Used car prices rise, imports fall

Sharif Ahmed
Used car prices rise, imports fall

The prices of small and large reconditioned vehicles, including hybrids, have risen, as the depreciation facility has been reduced by 5 per cent to discourage imports of older vehicles.

In the national budget for the 2018–19 fiscal year, the depreciation facility was reduced by 5 per cent year-on-year to discourage imports of older cars. As a result, the revised price of the cars has increased from Tk. 1 lakh to Tk. 4.5 lakh by cubic centimetres (cc).

Habib Ullah Dawn, the president of the Bangladesh Reconditioned Vehicle Importers and Dealers Association (BRVIDA), said the prices of small and large reconditioned vehicles, including hybrids, have increased from Tk. 1 lakh to Tk. 4.5 lakh per car on account of the reduction in depreciation rates by five per cent year-on-year.

“Reducing the deprecation of old cars means there is no good news for middle-class families,” he observed. In the national budget for the 2018–19 fiscal year, the one-year to two-year-old vehicle depreciation rate fell from 15 per cent to 10 per cent, two-year to three-year-old vehicle depreciation was reduced from 25 per cent to 20 per cent, three-year to four-year-old vehicle depreciation fell from 35 per cent to 30 per cent and four-year to five-years-old cars declined from 40 per cent to 35 per cent.

Mohammed Habibur Rahman, the BRVIDA general secretary, told The Independent: “We demanded the removal of the new and old or remanded car taxis. We also recommended deducting 10 per cent of the dollar or trade discounts from the new value of yellow book, along with year-wise depreciation rates, which should be kept as before,” he said.

“As a result of this, the imports of reconditioned Japanese cars and our car sales have both gone down drastically over this period,” he said.

He also said many cars from India are coming to Bangladesh, but there was a question mark over their value. “They would vanish in a few years, but Japan’s five-year-old cars can be used easily and effortlessly for 10 to 15 years.”

He also observed that the people of India are not using their country’s cars. So India’s producers are pushing their low-end cars into Bangladesh, he alleged.

Dawn said, “For the past 40 years, reconditioned car dealers are supplying 90 per cent of the country’s vehicles. However, the existing depreciation was reduced by five per cent year-on-year in the budget to discourage reconditioned cars. We are shocked and saddened by this decision.”

In the budget, the level of 1 to 1600cc has been increased to 1800cc. The BRVIDA president said, “The way for the import of hybrid cars has been cleared. Thank the finance minister for this.”

He added: “We demand a review of the proposed tariff.” Level 1 to 1600 cc cars have an import duty of 127 per cent and for cars 2000 cc and above, the import duty is 212 per cent, he pointed out.   

 

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Editor : M. Shamsur Rahman

Published by the Editor on behalf of Independent Publications Limited at Media Printers, 446/H, Tejgaon I/A, Dhaka-1215.
Editorial, News & Commercial Offices : Beximco Media Complex, 149-150 Tejgaon I/A, Dhaka-1208, Bangladesh. GPO Box No. 934, Dhaka-1000.

Editor : M. Shamsur Rahman
Published by the Editor on behalf of Independent Publications Limited at Media Printers, 446/H, Tejgaon I/A, Dhaka-1215.
Editorial, News & Commercial Offices : Beximco Media Complex, 149-150 Tejgaon I/A, Dhaka-1208, Bangladesh. GPO Box No. 934, Dhaka-1000.

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