Auto battery market heats up

Increasing demand for IPS (instant power supply) systems to temporarily meet the power crisis at homes hikes prices of automotive batteries.
Customers have to pay an additional Tk 500 to Tk 2,000 for an automotive battery unit, said traders. According to market data, automotive battery prices range between Tk 5,750 and Tk 12,750 a unit.
The hot weather mainly backed sales by up to 20 percent in the last few days. Also, the trend of installing solar power systems fuels demand.
"There is a crisis in the market. Automotive batteries are an alternative to IPS batteries," said Abul Kalam Azad, senior executive officer of Hamko Group, a market player.
Two years ago, the market consumed 50,000 batteries a year, but demand rose to 100,000 now, he said.
Rahimafrooz Batteries Limited (RBL), Hamko Group, Navana, Volvo are the some market players.
Battery sellers at Bijoy Nagar, the main hub, however said the selling prices still range in line with the offer prices by manufacturers.
Zakir Hossain, a trader at Bijoy Nagar, said the batteries that sold at Tk 8,500 a few months back are now selling at Tk 10,000. "I used to sell 10 batteries a day, which now dropped to three a day, due to a supply shortage."
Mahbubur Rahman, manager of Hamko Group, admitted to the price hike of automotive batteries. He said due to a shortage of power, the company's production fell to 8,000 units a month from more than 10,000 units a month on average.
"We hope to overcome the crisis soon," said the official of the Khulna-based battery maker.
However, top market player Rahimafrooz is selling batteries at a fixed rate. Niaz Rahim, group director of Rahimafrooz Group, said Rahimafrooz batteries are selling as per the company's offer price. "The price does not vary even at retail levels, as we monitor the market daily."
Rahimafrooz boasts a 75 percent share of the market.
Zahir Ahmed, a customer at Bijoy Nagar looking to buy a car battery, said some companies sell batteries at fixed rates. "But some retailers demand extra money due to the crisis.”
Solar systems require battery backup to generate electricity. Infrastructure Development Company Ltd, a major financier for solar power systems, said it receives at least five new proposals for green technology-based businesses a day.
Installation of solar home systems increased to 17,000 a month in 2009 from around 10,000 a month in 2008.
According to IDCOL, installation of solar home systems by 15 partner organisations increased to 421,202 until November 2009. The number was 300,000 in 2008.