Turmoil eats into car sales and loans

Car loan disbursements took a major hit last month as vandalism warded off prospective buyers from making their custom.

Around 4,000 vehicles were vandalised and another 1,000 burnt since the BNP-led alliance embarked on its non-stop countrywide demonstrations on January 6, according to the Federation of Bangladesh Chambers of Commerce and Industry.

The interest from customers for car loans is very low, said Mosleh Saad Mahmud, head of products and collections at Brac Bank, whose car loan disbursement slumped 50 percent in January from the previous month.

Most of the prospective buyers have deferred their plans to buy cars fearing they would be attacked by picketers, said Mashrur Arefin, deputy managing director of The City Bank, whose car loan disbursement in January plummeted around 80 percent month-on-month. 

One such buyer is Fahmida Rashid Anika, brand communication manager at an advertising firm. She postponed her plan to buy a car until June.

Arefin, however, is optimistic that the demand for car loans would spring back once the political situation calms down.

Meanwhile, sales of reconditioned cars in January collapsed 90 percent from December last year, according to Bangladesh Reconditioned Vehicles Importers and Dealers Association (Barvida).

In normal times, the average daily sales stood at Tk 30 crore but amid the political turbulence it plunged to Tk 3 crore last month, it said.

The sector, whose annual market is worth Tk 10,000 crore, lost around Tk 850 crore in probable sales since the start of the political crisis, said Barvida President Md Habib Ullah Dawn. 

Not only that, due to the non-stop countrywide blockade car dealers are unable to take delivery of imported reconditioned cars and are having to pay additional charges to port authorities, he said.

Since the onset of the turmoil, car dealers paid Tk 8.10 crore as fine for overstaying to port authorities. At present, a total of 6,443 reconditioned cars are stuck at the ports.

“We want an immediate solution -- we want to do business in a peaceful environment,” Dawn said.

Ifad Autos, Ashok Leyland's local dealer, too has been hit by the turmoil, with its sales crashing 95 percent in January from the previous month.

“Our distributors cannot open their shops for the violence and there are no new buyers either,” said Iftekhar Ahmed Tipu, chairman of Ifad Group, which has 25 distributors across the country.

Some buyers paid advances ranging from Tk 50,000 to Tk 1 lakh on their vehicle purchases in December, but they are afraid to take delivery now, he said.

The company, which generated a turnover of Tk 815 crore last year, has 600 vehicles stuck at the ports.  “We are very anxious. Things cannot go on like this. We really want a solution.”

Meanwhile, Bangladesh Road Transport Authority missed out on Tk 48 crore as vehicle registration fees in the last 30 days, while the National Board of Revenue lost Tk 350 crore as tax from car sales, according to Barvida data.

The economy has already lost an estimated Tk 75,000 crore since January 6, according to FBCCI.

gazitowhid@thedailystar.net