Import ban on used cars to leave the market uneven | The Daily Star
12:00 AM, September 13, 2020 / LAST MODIFIED: 02:47 AM, September 13, 2020

Import ban on used cars to leave the market uneven

Barvida claims, criticising proposed Automobile Policy 2020

The government's plan to impose a ban on the import of reconditioned vehicles to promote local manufacturing and assembling will create an imbalance in the domestic market, according to Bangladesh Reconditioned Vehicles Importers and Dealers Association (Barvida).

Manufacturing cars in Bangladesh would be a matter of national pride and Barvida encourages this initiative, said Abdul Haque, president of the association.

But the government should give priority to the choice of customers before going for such a ban as 85 per cent of the passenger cars in Bangladesh at present are imported reconditioned vehicles, he said.

The proposed policy will destroy competition between the importers of reconditioned and brand-new cars, he said.

"The government didn't even include a representative from this sector while preparing the draft policy."

Barvida will hand over its observations on the proposed Automobile Policy 2020 to the industries ministry today.

As per the proposed policy, imports of reconditioned cars would be phased out over the next five years in a bid to encourage investments in the local assembly and manufacture of motor vehicles.

As such, the government will formulate the 2020 Automobile Industry Development Policy, a draft of which has already been shared with various stakeholders for finalisation.

Currently, state-run Pragati Industries assembles cars designed by Japanese automaker Mitsubishi Motors while PHP Motors, a sister concern of the PHP Family based in Chattogram, manufactures cars made by Malaysia's PROTON Holdings Berhad.

Besides, Indian automotive giants Tata Motors and Mahindra & Mahindra recently showed interest to go for similar partnerships with local manufacturers to grab a bigger slice of the growing automobile industry in Bangladesh.

"This is a clear conspiracy carried out by a vested quarter that only wants to secure their own interests," said Mohammad Shahidul Islam, secretary general of Barvida.

An immediate ban on import of reconditioned cars would be a suicidal step for the government as it directly earns at least Tk 4,000 crore in revenue from import duties alone, he added.

Besides, Barvida also helps in the country's economic development by paying both value-added and income tax.

Over the past three years, about Tk 20,000 crore has been invested in the sector, which created at least 30,000 direct employments.

"The government should try to create a competitive market for the buying and selling of new or reconditioned cars in consideration of the customers," Islam said, while citing the case of the reconditioned car market of Australia, the UK and the US.

Islam also alleged that imported brand-new cars do not comply with global standards. "Besides, these vehicles do not originate from their mother countries but on the other hand imported reconditioned cars are from their countries of origin."

According to the secretary general, now only 'Euro 6' emission standard cars are allowed to operate in developed countries and imported reconditioned car meet this standard while most brand-new cars in Bangladesh are yet meet the requirement on carbon emissions.

He went on to advise the government to set up a quality control institute that would regulate the import of brand new or reconditioned passenger cars in a bid to avoid the adverse environmental impact of carbon emissions.

Importers opt for Japanese cars that are sophisticated, environment-friendly and cost-effective, said Mannan Chowdhury Khasru, former president of Barvida.

Besides, Barvida has created a market for reconditioned cars in Bangladesh to help meet customers' demand.

"We do not stand against the manufacturing of brand-new cars in Bangladesh but instead, we want a competitive market instead of phasing out imports of reconditioned cars," Khasru said.

"The government should create a level playing field for locally produced cars and imported ones so that the market can automatically decide the industry's future," he added.

In this regard, the former Barvida president demanded withdrawal of the proposed ban on reconditioned car imports in the automobile policy for 2020. 

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