Sales of used hybrid cars are surging for better fuel economy and significantly lower prices than the brand new ones, according to the Bangladesh Reconditioned Vehicles Importers and Dealers Association (Barvida).
In the face of rising demand from reconditioned car importers, the government from this fiscal year has allowed the import of second-hand hybrid cars as well as slashed the supplementary duty.
The SD on hybrid cars of up to 1,600cc has been slashed by 5 percentage points to 25 percent for fiscal 2017-18. For hybrid cars of more than 1,600cc but less than 2,000cc, the duty has been reduced by 15 percentage points to 45 percent.
For hybrid cars exceeding 2,000cc but less than 3,000cc, the SD has been fixed at 60 percent, down from 150 percent in the previous fiscal year.
The government has also cut the SD on hybrid cars with higher engine capacity, according to the National Board of Revenue.
Though the cut in SD has caused the prices of hybrid cars to decline, the price gap between new and old cars still remains high.
For example, the price of a brand new Toyota Camry of the hybrid variety is about Tk 90 lakh, but that of a four-year-old one is about Tk 35 lakh, according to Habib Ullah Dawn, president of Barvida.
“Almost all of us are importing reconditioned hybrid cars. Because, hybrid and electric cars are going to be the future,” said Dawn, also the chairman of Auto Museum.
Auto Museum has so far imported 42 reconditioned hybrid cars this fiscal year.
He said used hybrid cars account for 10 percent of the total reconditioned cars brought into the country in the first half of the fiscal year.
In the first half of the fiscal year, a total of 11,476 units of reconditioned vehicles were imported, up 49 percent year-on-year, according to data compiled by Barvida.
“Imports will rise in the days ahead,” Dawn said, adding that 200 used hybrid cars are awaiting clearance at the ports.
Buyers' interest rose after the government reduced the duty on hybrid cars, said Md Rafiqul Haque, head of operation of HNS Automobiles, which imported 10 reconditioned hybrid cars this fiscal year on a test basis.
“And the vehicles get sold,” he said, while tipping the sales of hybrid cars to grow faster than the normal cars given their fuel economy is better.
One of the drawbacks with owning hybrid cars at present is that their replacement batteries are not widely available yet.
As of now, only three workshops in Dhaka have the facilities to provide repair services and maintenance support to owners of hybrid vehicles, according to Dawn.
“The batteries for hybrid cars are expensive,” said Shafqat Ahmed, manager of business development of Navana Ltd, while blaming the high duty for the high prices.
Dawn said a local battery manufacturer is exploring the possibility to make batteries for hybrid cars in Bangladesh.