The motorcycle makers' association has demanded an 81 per cent cut in bike registration fees in next fiscal year's budget as the purchasing power of the general mass has seen a sharp fall due to the pandemic.
The registration cost of a motorcycle, including registration fees, road tax, supplementary duties and other charges, is about Tk 22,000 on an average, which is about 25 per cent of the price of a 100cc motorcycle, the best-selling engine capacity.
The association wants the fee to be fixed at Tk 4,000.
"The pandemic has taken a heavy toll on the earnings of customers. We didn't sell a single motorbike since the coronavirus outbreak," said Matiur Rahman, president of Bangladesh Motorcycle Assemblers and Manufacturers Association (BMAMA).
Previously, the sales figure used to hit Tk 600 crore a month, he said in BMAMA's proposals for the national budget.
"Motorcycles not only save time and money but also help people travel by maintaining social distance," said Shah Muhammad Ashequr Rahman, head of finance and commercial at Bangladesh Honda.
So a cut in registration fees will encourage people to buy motorcycles at a time when they are struggling with falling purchasing power and disposable income, he added.
Besides, the registration cost in Bangladesh is almost four times more than in the neighbouring countries, according to Himihiko Katsuki, managing director and chief executive officer of Bangladesh Honda.
If the registration fees are not cut, people will not be able to afford motorcycles and the manufacturers will not be able to maintain factories, which will ultimately cause massive job cuts, said Rahman, also the chairman of Uttara Motors, the sole distributor of the Indian Bajaj brand's two-wheelers.
Motorcycle industry contributes around Tk 2,000 crore as duty, tax, and VAT directly every year. Besides, there exists opportunity for earning revenue of around Tk 1000 crore from registration fees.
In fiscal 2019-20, in line with the Value Added Tax and Supplementary Duty Act 2012, the government imposed 10 per cent supplementary duty on the registration fees, which increased the cost of registration.
The demand for motorcycle may see a 40 per cent drop this year because of the ongoing economic crisis caused by the pandemic.
"That's why we would like to request an immediate reduction in registration fees, road tax, supplementary duties and other charges on every new motorcycle for the sake of our survival," Rahman added.
Meanwhile, the association appreciated the promulgation of the 'Motorcycle Industry Development Policy 2018' that aims to increase the sector's contribution towards GDP from 0.5 to 2.5 per cent by 2025 and facilitate the establishment of a world-class motorcycle industry in Bangladesh.
This has elevated the industry to a better position than ever before.
Motorcycle sales had leapt to about 5 lakh units in 2019 from 1.5 lakh in 2017 thanks to a cut in import duties.
The industry forecasted a growth of at least 20 per cent in fiscal 2019-20, which looks like a far cry now, he said.
At present, some 10 brands of motorcycles are manufactured or assembled in Bangladesh, namely Runner, Hero, Bajaj, Honda, TVS, Yamaha, Suzuki, Benelli, Zongshen and Lifan.
About Tk 8,000 crore has so far been invested in the sector, which provides direct or indirect jobs to about two lakh people, according to Rahman.
Every brand is trying their best to bring down the motorcycle prices by manufacturing the bikes locally, Katsuki said.