Import ban on used automobiles to leave the marketplace uneven

13 Sep 2020 10:45 AM
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The government's intend to impose a ban on the import of reconditioned vehicles to market local manufacturing and assembling will generate an imbalance in the domestic industry, according to Bangladesh Reconditioned Vehicles Importers and Dealers Association (Barvida).

Manufacturing autos in Bangladesh will be a subject of national satisfaction and Barvida encourages this initiative, stated Abdul Haque, president of the association.

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

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

"The government didn't even add a representative out of this sector while preparing the draft insurance policy."

Barvida will give its observations on the proposed Vehicle Policy 2020 to the industries ministry today.

As per the proposed plan, imports of reconditioned automobiles would be phased out over another five years in a bid to encourage investments in the neighborhood assembly and manufacture of motor vehicles.

As such, the federal government will formulate the 2020 Automobile Industry Development Policy, a draft which has previously been distributed to various stakeholders for finalisation.

Currently, state-run Pragati Industries assembles cars created 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 hometown manufacturers to grab a bigger slice of the developing automobile industry found in Bangladesh.

"This is a distinct conspiracy completed by a vested one fourth that only really wants to secure their own interests," said Mohammad Shahidul Islam, secretary standard of Barvida.

An immediate ban on import of reconditioned automobiles would be a suicidal stage for the government since it directly earns at least Tk 4,000 crore in earnings from import duties alone, he added.

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

Over the past 3 years, about Tk 20,000 crore has been committed to the sector, which created at least 30,000 direct employments.

"The federal government should try to make a competitive marketplace for the investing of new or perhaps reconditioned cars in consideration of the clients," Islam explained, while citing the circumstance of the reconditioned car marketplace of Australia, the united kingdom and the US.

Islam also alleged that imported brand-new cars do not comply with global criteria. "Besides, these vehicles usually do not originate from their mom countries but alternatively imported reconditioned cars will be from their countries of origin."

According to the secretary standard, now only 'Euro 6' emission standard cars are permitted to operate in created countries and imported reconditioned car meet up with this standard some brand-new automobiles in Bangladesh are yet meet up with the requirement on carbon emissions.

He went on to advise the federal government to collection up an excellent control institute that could regulate the import of completely new or perhaps reconditioned passenger cars found in a bid in order to avoid the adverse environmental effect of carbon emissions.

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

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

"We usually do not stand against the production of brand-new vehicles in Bangladesh but instead, we wish a competitive market rather than phasing out imports of reconditioned autos," Khasru said.

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

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