Imported motorcycle trades shrink for LC issue

Al Amin :
The imported motorcycle trades are shrinking in the country aggressively due to letter of credit (LC) complication caused by dollar shortage.
Many importers are being forced to shut down their showrooms and warehouses for running out bikes, sector insiders said.
The country’s CBU (Complete Build Unit) motorcycle showrooms are running out of bikes. But the traders are not being able to open any LC for several months due to dollar crisis, they said.
The prices of the bikes are increasing in the competitive market as the business is shrinking, they added.
Demand for personal and commercial motorbike is growing fast in the country as an easier and a comfortable transport. The market size of it has crossed around Tk 10,000 crore as annual demand is around 6 lakh per year.
They said the market for high-capacity motorcycles is constantly growing in Bangladesh as more than 6 lakh motorcycles were sold in 2021 and the figure may rise to 20 lakh soon and the huge demand is fulfilled by CKD, SKD and CBU motorbikes.
Although the price is a bit higher, the CBU motorcycle is at the top of the smart generation’s choice in terms of finishing and durability.
But, the import of CBU motorbike has been stopped for the last few months due to the dollar shortage.
Nurun Nahar Leena, President of Bangladesh CBU Motorcycle Importers Association, said, “Earlier, I sold more than 150 motorcycles every month. But, I managed to sell three to four motorcycles in last month.”
“We are not able to import motorcycles as per the customer demand. Earlier, I had two shops. But, I was forced to leave one of them,” she said.”We pay duty 154 per cent against per unit of bike. Besides, the government receives registration fees and VAT during sales. The government will lose everything, if the business is being stopped,” Leena said.
Md Zakir Hossain, Joint General Secretary of the organization, told The New Nation, “We are not able to open LCs to import bikes. The central bank fixed hundred per cent LC margin for importing it and we had agreed to do it.”
“But the LC opening is completely suspended. We can’t run our business,” he added.
Tanveer Ahmed Robin, Manager of Universe Motors, said, “We are trying to control the price of bikes, but we are not able to do it according to the current market demand. The price is increasing. All the bikes that were in the pipeline have already come to our showroom. We have no option but to shutdown our showrooms.”
Dr Mahfuz Kabir, Research Director of the Bangladesh Institute of International and Strategic Studies (BIISS), said, “There is a pressure on foreign exchange reserves in the country. It must be considered. At the same time, it is also true that there is a huge demand for motorcycles within the country.”
“In that case, if we can allow LC even to a limited extent and at 100 per cent LC margin, it will help to meet the domestic demand temporarily. It will also help to increase customs revenue of the government,” he added.