Drive, beyond Dhaka
Reconditioned cars sales have grown 43 percent in 2009 mainly because of the increased purchasing power of landowners on the outskirts of Dhaka.
Industry people said district-level middle-income groups -- mostly remittance earners, real estate managers and government bank executives -- contributed to the growth.
According to Bangladesh Association of Reconditioned Vehicle Importers and Dealers (Barvida) statistics, 26,350 units were sold on the local market, mainly in Dhaka, in 2009 against 14,942 units in 2008. A total of 10,244 units were sold in 2007 and 8,500 in 2006.
New car sales were almost static in 2009 -- about 2,200 units, mostly from Japan, were sold, while the figure was 2,050 the previous year.
“Land prices grew manifold in areas adjacent to the capital city, mainly Narayanganj, Gazipur, Manikganj and Munshiganj. They can now afford to buy a car by selling a katha of land," said Md Abdul Hamid Sharif, owner of Arif Motors.
Observing sales at different showrooms in Kakrail area, he said three in 10 cars were sold to the buyers from outside Dhaka.
“Again, the traffic condition in the suburban regions is not so intense as in Dhaka," Sharif added.
Abdul Haq, former Barvida president and owner of Haq's Bay Automobile Ltd, said the middle-income groups at district levels, with support from remittance, are purchasing reconditioned cars.
“The public transport systems in district towns have not developed at a satisfactory level. In addition, about 10 million people are sending remittance to their families across the country. This newly emerging middle class at district levels is contributing to increased car sales in the last couple of years,” Haq added.
Haq said even though a large section of people in Dhaka have the ability to purchase cars, they feel discouraged to do so because of horrific gridlocks.
If the traffic situation in Dhaka does not improve, car sales will not grow in Dhaka in the next few years, Haq said.
Reconditioned car importers are in a festive mood as they are enjoying bullish growth in car sales despite plunging global auto sales, especially in key markets in Europe, North America, Japan, China and India.
Barvida officials said local car sales were almost 5,000 units a year on average for more than a decade until 2006, after which, car sales rocketed for several years because of the robust economic growth.
Saifuddin Khaledh, who runs two private schools and a university in Sylhet, has recently bought a reconditioned car to drive in Sylhet city.
"I have to commute to three different places a day to attend meetings, which is really difficult if I rely on public transport," he said.
Anwar Hossain, a machinery importer in Khulna district, also bought a reconditioned car weeks ago. He said he does not consider the local transportation system safe anymore for his three school-going girls. “You cannot trust a rickshaw or private vans for students. A few months ago, a speeding truck killed a school girl at Khalishpur."
Meanwhile, car importers yesterday urged the government to rationalise the tax-rate valuation for used car imports.
Currently, importers have to pay the same level of taxes for all cars that have been used between one and six years.