Car imports through Ctg port fall 22% in 2023

Car imports through the Chattogram port dropped by around 22% in 2023 compared to the previous year, and over the last five years, the decline has been even more significant, reaching a staggering 60%, according to the Chattogram Customs House.

Importers attribute the recent downturn to issues related to opening letters of credit, stemming from the ongoing dollar crisis and the Russia-Ukraine war, and a decrease in demand linked to the decline in customers' purchasing power.

Moreover, they say the preference for the Mongla port for car import, driven by its lower charges and superior facilities, has intensified the decline in imports through the country's main seaport.

According to the Bangladesh Reconditioned Vehicles Importers and Dealers Association (Bervida), currently around 60% of the country's cars are imported through the Mongla port. The remaining 40% is through the Chattogram port.

According to Chattogram Customs House data, 24,150 cars were imported through the Chattogram port in 2023, compared to 30,880 in 2022. Five years ago, in 2019, the number of imported cars through the port was 61,467.

Importers say following the initial shock of the Covid-19 pandemic, car imports returned to normalcy. However, the subsequent shock of the Russia-Ukraine war created a new challenge, leading to a dollar crisis in the country.

As per Chattogram Customs House data, 28,697 cars were imported in 2020. In 2021, with the Covid-19 situation somewhat normalised, car imports surged by 47.97%, reaching 55,151 vehicles.

Importers say importing cars with a 100% bank LC (letter of credit) margin is not feasible, as banks are currently limiting the opening of LCs. The crisis is causing many small-scale importers to exit the car business.

They say they support the government's decision to limit the import of luxury goods in order to preserve the foreign reserve, but they are currently facing challenges in importing cars to meet the existing demand.

Mohammed Shahidul Islam, general secretary of Bervida, told TBS, "We are unable to open LCs due to the dollar crisis, and consequently, importing cars has become challenging. With the decline in customers' purchasing power, there is a decrease in the demand for cars."

He added, "Due to these crises, many traders have halted car imports. Government support is needed to sustain the business."

Badruzzaman Munsi, deputy commissioner of Chattogram Customs House, said the requirement for traders to open LCs and import cars with a 100% margin is challenging for many, leading to a decrease in car imports.

Regarding importers' preference for car imports through the Mongla port, Habibur Rahman, a car importer, said the parking fees at Mongla port are lower than at Chattogram port.

"The ports offer a three-day grace period for free parking upon arrival. Subsequently, from the 4th to the 15th day, the parking fee is Tk905 per day at Chattogram port and Tk360 per day at Mongla port, with increasing charges after 15 days," he said.

According to data from the Chattogram port, there are 3,000 car storage sheds, with additional capacity to accommodate 300-400 cars in multiple sheds in the port.

Around 75% of cars imported into Bangladesh are reconditioned or old. The remaining 25% consist of brand new cars.

Bervida reports an investment of around Tk20,000 crore in the reconditioned car import sector, contributing an annual customs revenue of about Tk5,000 crore.

Meanwhile, according to the Chattogram Customs House, in November 2022, certain car importers brought in 650 reconditioned cars without LCs. Subsequently, the Chattogram and Mongla customs authorities released these cars with fines.

However, in 2023, there were no reported incidents of car imports without LCs due to heightened customs scrutiny, as stated by the customs authorities.