Automobile industry under stress

The automobile industry in Bangladesh has witnessed remarkable growth over the past 20 years. The country saw an influx of luxury brands like Audi, BMW, and Mercedes, leading to a significant rise in car ownership. The streets were crowded with more vehicles than ever before.
However, the industry came to a standstill after the COVID-19 pandemic. While the market rebounded post-pandemic with the introduction of brands like MG and Chery, recent political turmoil has triggered a sharp decline, particularly in the sales of imported luxury cars.
Owning a car remains a challenge, especially for the middle class. Import taxes soar as high as 400 per cent, and annual taxes exceed 30,000 BDT. Additionally, fuel prices have skyrocketed, reaching nearly 130 BDT per litre from just 89 BDT, making car ownership increasingly unaffordable.
In response, brands like Hyundai have established assembly plants in Bangladesh, with more manufacturers considering similar investments. If full-scale manufacturing plants are set up, production costs could be significantly reduced, making cars more affordable-similar to the scenario in neighboring India.
The critical question remains: Will the automobile industry make a dramatic comeback? Could this transformation shape the future of the country?
Annan Rahman Sahil
North South University, Major- Management