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Appetite for high-end cars getting stronger

JAGARAN CHAKMA and SHAER REAZ
High-end car sales grew about 17 percent annually in the last three years thanks to Bangladesh's growing affluent class, brought about by the country's steady economic growth over the past decade.
Bangladesh has topped the list of countries that saw the quickest growth in the number of ultra-wealthy people between 2012 and 2017, according to a recent report of New York-based research firm Wealth-X.
The number of ultra-high net-worth individuals in Bangladesh rose 17.3 percent during the period, showed the World Ultra Wealth Report 2018.
These days, vehicles of luxury brands such as BMW, Audi, Mercedes-Benz, Lexus, Jaguar, Maserati, Porsche as well as the high-end models
ofToyota, Nissan and Mitsubishi are a common sight on the Dhaka roads.
About 450 units of luxury cars were sold in 2017; the tally was not more than 300 before 2014.
The government considers vehicles with more than 2000cc engine capacity to be luxury cars, although some brands are producing luxury vehicles with smaller engine capacity as well.
The major customers of luxury cars are industrialists and the government.
The top officials of multinational companies and international organisations like the World Bank, the Asian Development Bank, the United Nations Development Programme, and the USAID use luxury cars.
Dewan Muhammad Sajid Afzal, director for operations at Executive Motors, the sole distributor of BMW in Bangladesh, said the company's
sales of luxury car grew four times in the last five years on the back of higher economic growth.
In 2017,135 units of BMW cars were sold. As of October this year, more than 80 units were sold.
"As people became richer they shifted to luxurybrands from reconditioned premium cars."
The prices of BMW cars start atTk 75 lakh and gouptoTk3.25 crore.
Executive Motors imports BMW cars ranging from l,500cc to 2,000cc as the import duty is reasonable and within the purchasing power of customers, Afzal added.
Pragati Industries, a state-owned automotive company that assembles Mitsubishi's sport utility vehicle Pajero, sold about 400 units in fiscal 2016-17, down from 630 units a year earlier, according to Touhidul Islam, its managing director. The government is the main buyer of Pragati and it has decided to allocate high-end cars only to senior secretaries and secretary-level officials.
“This is why our sales dropped."
Pragati assembles 2,477cc Pajero, which sells for about Tk 92 lakh.
Industrialists frequently visit their factories located outside of Dhaka city, so comfort and safety are important for them, said Mohammed Shahidul Islam, chairman of HNS Group, which imports reconditioned and brand new high-end SUVs like Nissan Patrol and Toyota Land Cruiser from Japan.
“That's why, they buy high-end cars," he said, adding that they do not mind buying reconditioned luxury cars as they come in conditions almost as good as new and their prices are almost one-third of brand new ones.
For instance, a brand new Toyota Land Cruiser sells forTk 9 crore, while a reconditioned one costs Tk 4 crore.
HNS recorded more than 10 percent growth in sales in the last three years, according to Islam.