Recession hits car market

NEWS report in an English daily on Thursday said over 6,000 cars are remaining stranded at Mongla and Chittagong ports as the blockade and frequent hartals are working as big impediments to importers to release them and bring them to showrooms. It said importers are afraid of fire attacks and vandalism on imported vehicles in roads and highways while moving them out of ports as the violence continues over 45 days so far without respite. Bangladesh Reconditioned Vehicles Importers and Dealers Association (BARVIDA) sources claimed they are counting over Tk 27 lakhs daily losses as parking charge to the port authorities for not releasing the vehicles and thus adding to escalating cost of imported vehicles that to be passed on the buyers at the end. The report said the stranded vehicles included 4,400 trucks and the remaining are cars and such other transports imported as reconditioned vehicles from Japan.
Meanwhile sales have also nose-dived in the turmoil thus threatening the businessmen of blocking of their capital in one hand and to count on additional interest on bank loans on the other. Total losses to the importers may stand at Tk 30 crore so far. Reports said last year was a good business year when businessmen sold 16,400 units of car alone but it is on other way round this year. People are not buying cars having its multiple impacts on importers, exporters, bank, insurance, leasing firms and government registration revenues.
As we see this is a shocking reality for the businessmen who got their imported lot of vehicles stranded in the port without visible business prospects to sell them again in near future as they don’t know when the situation will become normal and when buyers will have enough fund to go for buying a car. It may be a total recessionary year as far as motor vehicles business is concerned and the cascading impact will be enormous in the entire economy and business. As we see, most business chambers are now demanding loan rescheduling and interest waiver to cope with the plunge in their business car importers may also demand respite from the government and the revenue authorities may thus face shortfall in duty collection in one hand while banks and insurance may also suffer from loss of profit.
We don’t see any dramatic solution to the problem although its impacts would be visible on daily basis. The only solution lies with the government and the opposition and we urge them to end the crisis to let business work on its own way.