The government plans to phase out the import of reconditioned cars over the next five years.

The government plans to phase out the import of reconditioned cars over the next five years in a bid to encourage investments in the assembly and manufacture of motor vehicles within Bangladesh.

In this regard, the government will formulate the 2020 Automobile Industry Development Policy, a draft of which has already been shared with various stakeholders for finalisation.

Currently, state-run Pragati Industries assembles cars designed 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 in setting up similar partnerships with local manufacturers to grab a bigger slice of the growing Bangladesh automobile pie.

At present, about 63 vehicles are sold each day. In 2012, when the market had just started taking off, the daily figure was 29, according to the Bangladesh Reconditioned Vehicles Importers and Dealers Association (Barvida).

In 2019, car sales amounted to Tk 5,000 crore, which was more or less the same as in the previous year.

Bangladesh's thriving automobile sector has grown 8 per cent on average every year since 2012, said various industry insiders.

As per the draft policy, the country's automobile industry has been considered as a potentially major industrial sector for the last two decades as it has registered impressive annual compound growth and contributes greatly to the national economy.

The sector is nearing critical mass thanks to its ability to adopt new technologies and increased efficiency in human resource management.

Bangladesh's automobile industry could even become a part of the global supply chain in the future, the draft policy said.

The growing demand for cars, motorcycles and such is a result of the rise in purchasing power among the general public, it added.

The policy aims to provide a clear roadmap on how to take the country's evolving automotive ecosystem further by implementing specific changes to the regulations that govern the design, technology, testing, manufacture, import and export, sale, use, repair and recycling of motor vehicles, their components and services.

It will also eventually impose a total ban on the import of completely built-up units of used vehicles. This initiative will diversity the domestic automobile market as locally assembled cars are more affordable than their imported counterparts.

In turn, it will attract both local and foreign investment, leading to enormous socio-economic benefits, the draft said.

To this end, the maximum age limit on imported passenger vehicles will gradually be reduced over the next five years.

During this period, however, the government will still permit inbound shipments of reconditioned cars.

The industries ministry will forward the draft policy to the cabinet for approval once the concerned stakeholders sign off on it.

However, The Daily Star could not reach ministry officials for comment as the government recently issued a notice stating that speaking to the media without securing clearance from higher authorities would be held as a breach of regulation.

"This is a clear conspiracy carried out by a vested quarter that only wants to secure their own interests," said Mohammad Shahidul Islam, secretary general of Barvida.

An immediate ban on importing reconditioned cars would be suicidal for the government as it directly earns at least Tk 4,000 crore in revenue from import duties alone, he added.

Besides, Barvida also assists the country's economic development by paying both value-added and income tax.

Over the past three years, about Tk 20,000 crore has been invested in the sector, which provides at least 30,000 opportunities for direct employment.

"We are not against the proposed policy. But still, the government should instead create a competitive market for the buying and selling of new or reconditioned cars in consideration of the customers," he said, while citing the case of the reconditioned car market of Australia to further his point.

He went on to advise the government to set up a quality control institute that would regulate the import of brand new or reconditioned passenger cars in a bid to avoid the adverse environmental impact of carbon emissions.

https://www.thedailystar.net/business/news/reconditioned-car-imports-be-phased-out-govt-looks-ramp-local-assembly-1951081