Imports and sales of reconditioned cars in Bangladesh have taken a hit, primarily due to rising prices linked to the surge in the value of the US dollar and the country’s economic instability, as reported by market experts and data.
Data from the Bangladesh Reconditioned Vehicles Importers and Dealers Association (Barvida) reveals a 10% drop in reconditioned car imports during the first quarter of the current fiscal year compared to last year. This amounts to 5,995 units, down from 6,601 units last year.
Private car registrations have steeply declined, down by 36% compared to the previous year.
The Bangladesh Road Transport Authority (BRTA) registered 892 private passenger cars per month this year, compared to 1,391 per month last year.
A prominent reconditioned car importer shared their concerns anonymously, citing slow sales and difficulties with letter of credit (LC) openings.
Import duties were also affected, resulting in higher prices for cars.
While reconditioned car sales are dwindling, demand for brand-new cars is on the rise.
Consumers are attracted to the warranties and better value-for-money offered by new cars.
The market share of reconditioned cars has increased from 10% to 18% over the past five years.
To meet this demand, some companies are considering setting up assembling plants in Bangladesh for popular car models, ensuring affordability and quicker delivery.
Several manufacturers, including Hyundai, Proton, Runner Group, and Bangladesh Auto Industries Ltd, have already invested in such initiatives. More investments are in the pipeline, with Kia and six other manufacturers exploring opportunities in four-wheeler manufacturing.