There has been a great decrease in car sales this year compared to the previous years due to multiple reasons, some being the high fuel prices such as Diesel, gasoline, and petrol.
However, for Electric Vehicles, the main reason that brought a huge downfall to its production is the shortage of electrical components, such as electrical chips, which are an essential item for the manufacture of any electric vehicle.
In Bangladesh, the main key factor for the huge decrease in the sales of used cars is the higher import costs. As a result, according to some reports, there was about a 50% drop in sales. The Bangladesh bank is greatly responsible for the high import prices.
Due to the imposition of such great taxes and customs duties, a major loss of one-third of the total sales was recorded in the past three months.
And the policies which the Bangladesh bank implemented also took place for three months. As a result of these additional duties on comfy and luxurious cars, Japan’s low production of new cars, the Russia-Ukraine war (which greatly disturbed the transportation and import of raw materials and components from all over the world), and the skyrocketing fuel prices, locals have stopped the purchase of cars. Even the used ones are hard to find and expensive.
To solve problems with the import of cars, the central bank-imposed restrictions on purchasing new cars.
Furthermore, I was also instructed by the other banks by the central bank not to replace any old car between owners for at least a year. This means there will be no dealerships between the used cars as their owners cannot change.
According to the sources, these factors have caused almost a drop of 50% in the sales of both new and used cars in Bangladesh. Due to these circumstances, many used car dealers have gone out of business due to no commission to feed their families.
Furthermore, it is expected that we might see another decrement of 35% in the current car sales in the upcoming 2 months, next year sales will be very low.
According to new policies, the import duty on cars having engines of less than 3000cc will be 250%. Before this policy, there was only 200%. For cars with engines between 3000-4000cc, the customs duty has been raised from 350% to 500%, over a 250% increase in the import duty. For luxurious cars with 4000+ cc engines, the import duty remains at 500%.
Considering the policies that will come into action next year, the import of users will not benefit. Instead, it would be a loss to import vehicles. Due to the Japanese car manufacturing shortage, the prices of new ones have also skyrocketed.
As most of Bangladesh’s cars are Japanese, such as Honda and Toyota, the Bangladesh automotive sector will suffer a great loss due to these circumstances.
