Barvida cries tariff discrimination against Japanese reconditioned cars

Supporting the government's ambition to become a car-making nation, Bangladesh Reconditioned Vehicles Importers and Dealers Association (Barvida) called for realistic, progressive and implementable policies so that a real automotive manufacturing industry is established instead of it being another assembling unit.

The association of around 900 reconditioned vehicle importers and dealers, also the biggest stakeholder of the country's automobile sector, demanded protection and stability of their business, as, they said, they were increasingly facing tariff discrimination that was making Japanese reconditioned cars costlier than brand new cars. 

Barvida leaders expressed their concerns and put forward proposals at a pre-budget press conference in the capital on Wednesday. 

In recent years, the government has not been considering rational depreciation of used Japanese cars while determining the import value, and the inflated import value results in a higher unit price, they said.

On the other hand, brand new cars, mostly imported from new generation car making countries, are brought in often through under-invoicing.

The two factors combined pushed reconditioned cars into an uneven competition with brand new cars, despite the fact that the market prefers Japanese cars for their reliability, longevity and the value-for-money proposition, members of Barvida said.

Japan's reconditioned cars' valuation depends on Japanese "Yellow Book", a database that stores all information about the vehicles. 

Since brand new cars imported from any other country do not have any such transparent information bank, importers can manipulate the import value, Barvida said.  

The tariff discrimination resulted in a drastic slump of nationwide car sales to below 12,000 in 2020, from nearly 24,000 in 2017, said Abdul Haque, president of Barvida.

Referring to a study by the Japan International Cooperation Agency, he said sale of at least one lakh units was a must to make car manufacturing feasible. 

Supporting the dream for "Made-in-Bangladesh" cars in principle, Barvida said there must be cautious steps so that the nation did not fail after making an ambitious investment in the car industry, just as what had happened in Malaysia. Malaysia finally handed its Proton car project to Chinese investors, incurring a huge loss.

The organisation also warned against flooding Bangladeshi roads with substandard cars.

The tariff discrimination should be immediately addressed for the sake of a bigger car market tomorrow that can support car manufacturing here, the Barvida president said.

South Africa is an example where buyers are given choices of new and reconditioned cars, with a fair competing in the market.

In a matter of 60 years, South Africa grew its capacity to manufacture 40% of the cars sold in the market annually. They simultaneously export locally-made cars and import foreign brands to meet the market demand, Barvida said.

Its leaders also demanded a restructuring of supplementary duties on imports of hybrid and fossil fuel driven sports utility vehicles and withdrawal of the supplementary duty on imports of microbuses.