Country’s car market is growing at a rapid pace. The import of passenger cars has increased threefold in the last five years.
With the progression of time, the car has transformed into something more than just a medium of transport. 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.
Speaking to our team, industry experts explained that an increase in the number of ridesharing services, development of road infrastructure, low-cost car loans for government officials, and a lack of public transport options played a key role in this import growth.
Around 63 automobiles are now sold every day in Bangladesh while it was 29 in 2012, as per the Bangladesh Reconditioned Vehicles Importers and Dealers Association (Barvida).
According to Bangladesh Road Transport Authority (BRTA), around 9,224 vehicles were sold in 2012 whereas it was 18,227 units in 2018, meaning there has been 98% growth in the past six years.
In 2017, car sales amounted to around Tk 5,000 crore and the industry achieved 8% growth a year on an average since 2012, according to industry insiders.
“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).
Currently, the market size for reconditioned cars is around Tk. 3,750 crores. The size of the market is increasing by 4% every year, according to Barvida.
The number of 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.
Khaan M Sakib Us Salehin, deputy general manager of the sales division of Uttara Motors, said, “The current market size of passenger cars is 25,000 units, in which 20,000 units are recon.”
“Our sales growth was 20 to 25% over the last five years, while their annual growth target was 30%,” he added.
“Vehicle Buying & Selling Data 2018” published by Bikroy Platform says almost half of all the cars in the market are used at 45%, making it a very healthy second-hand car market. While only 5% of the cars in the market are brand new, 50% of the cars reconditioned – which is most commonly treated as new cars in the local market of Bangladesh.
“There are two reasons for buying reconditioned cars. One is the reconditioned are trouble-free to maintain, and people get well price while reselling. That is why people prefer to buy a reconditioned car at an affordable price rather than the brand-new car.” said Habib Ullah Dawn.
Bangladesh mostly imports reconditioned cars from Japan, which is around 95% of the total reconditioned car.
The public demand is growing rapidly. This coupled with the lack of proper public transportation has seen a massive spike in the sale of reconditioned, cost-effective cars in Bangladesh.