High-end car dealers having mixed experience

December 27, 2009

The year 2009 has been a mixed experience for the local sellers of brand new cars, especially who deal with the high-end market segment as some dealers had very good sales while others had little business.
Some importers argued that huge increase on duties on the high-end cars depressed their sales while others said they had a robust business in a changed political environment by bringing verities of products in the market.
“After the new budget came into force sales of brand new cars declined much and that of the high-end ones fell the most,’ said Hamdur Rahman, senior manager of Navana Limited.
Navana distributes the brands of Toyota and its sedan Camri and SUVs like Prado and Land Cruiser are regarded as the high-end models in Bangladesh.
‘We were used to sell 30 to 60 units each of these models each year, but this year’s sales have been fallen to less than half of that in the previous,’ said Hamdur.
Describing the impact of the hugely increased duty on luxury sedans and SUVs, Hamdur cited that a Toyota Camri, earlier priced at around Tk 50 lakh, now costs more than a crore.
MZ Sobhani, Head of Operations of Rancon Motors, however described that 2009 had been a very good year for their Mercedes Benz brands in Bangladesh.
Some 24 Mercedes Benz units were sold here in 2008 while, Subhani told New Age, Rancon was going to achieve its target of selling 50 units in 2009.
‘Local buyers have tremendously responded to the varieties of new Mercedes Benz models bought into Bangladesh market this year,’ Subhani said.
Agreeing that high duty had depressed the market of luxury cars on average, Subhani however pointed out that a crucial social behaviour of car users helped them having a good business.
‘Who gets used to owning a luxury car once would always want it because it is a symbol of social prestige and that’s a critical factor in the market,’ he said.
Subhani hoped that 2010 might be a better year for Mercedes Benz here as he predicts that businessmen who suffered a lot during the military-backed caretaker government in 2007-08, would have recovery in 2009.
Sabrina Sadek, vice-president at the Pacific Motors Limited claimed that increased duty had ravaged the market for SUVs and costly sedans.
Sales of the Nissan Patrol Jeep, which had long been a prestige model among the Bangladeshi CEOs and wealthy entrepreneurs, have come nearly to a halt, she said.
Auto market observers said higher duty has greatly affected the Nissan and Toyota SUVs as similar models are imported in CKD form by the state-owned Pragati Industries.
Due to lesser duty, CKD vehicles assembled by Praganti are sold at much cheaper prices and they grab a great portion of government purchase.
Industry people estimated that local market segment of brand new cars is around 4,000 units and that for the high-end [1500 CC plus cars as defined by market observers] segment is less than 500.
Mercedes Benz and BMW are being admired increasingly by the high spending car lovers while pricey sedans and SUVs from Japanese Mitubishi, Nissan and Toyota have a long presence in the local market.

Courtesy of NewAgebd

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