Vehicle registration drops 15% to a decade low in 2024
BRTA data shows that fewer than 3.08 lakh vehicles were registered in 2024, marking a 47% decline from 2022
The sluggish economy, high inflation, and rising borrowing costs dragged vehicle registrations down by 14.7% to a ten-year low in 2024, according to a Bangladesh Road Transport Authority (BRTA) report.
This decline followed a steeper 37% drop in the previous year, as consumers continued to avoid vehicle purchases.
BRTA data shows that fewer than 3.08 lakh vehicles were registered in 2024, marking a 47% decline from 2022.
Segments including buses, minibuses, trucks, mini trucks, auto rickshaws, tankers, tractors, and motorcycles were the most affected. Industry insiders attributed the slump to rising prices and high borrowing costs.
On the other hand, passenger cars, which faced a significant hit in the previous year, saw comparatively strong demand in 2024 as well-off families and companies chose not to wait any longer amid the continued surge in dollar prices.
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Since vehicles – or at least components of locally manufactured ones – are imported, the appreciation of the dollar drives up unit prices in the local market.
According to industry insiders, commercial vehicles are predominantly purchased with borrowed funds. Existing commercial vehicle owners were already struggling to pay their bank instalments from earned revenue due to higher fuel and labour costs.
"Their appetite for expanding fleets declined when bank loans became more expensive," said Hafizur Rahman Khan, chairman of Runner Group, which sells trucks, three-wheelers, two-wheelers, and electric cars.
The BRTA registers vehicles under 20 segments, and no major segment saw sales near those of two years ago.
Bus sales fell by 44% over two years to around 1,500 units, while truck sales, which had halved in 2023, rebounded by 16% to 2,671 units last year.
The struggles of the inflation-hit middle class continued to be evident in the motorcycle market. Only 2.62 lakh new motorcycles were registered in 2024 – the lowest since 2015 and nearly half of the peak in 2022.
Motorcycle companies have been struggling to keep prices affordable, as unit price increases have lagged behind the surges in import costs, said Nayeemur Rahman, head of business planning at Uttara Motors, which manufactures market-leading Bajaj motorcycles in Bangladesh.
"Still, we observe weaker customer responses, especially in the affordable entry-level segments usually bought by lower-middle-income people," he said.
A rush by affluent buyers to purchase cars at the start of currency depreciation in the second half of 2022 pushed sales of sport utility vehicles (SUVs), sedans, and hatchbacks higher that year, but sales returned to usual levels later.
Some 8,657 SUVs were registered in 2024, which was higher than the previous year but 15% lower than the 2022 peak.
On the other hand, declining popularity in sedans and hatchbacks dragged their sales down to an 11-year low of 10,499 units.
Delivery vans, which had seen a 63% drop in the previous year, rebounded by 25% in 2024 to 527 units as delivery companies moderately expanded their fleets.
