Sales of sport utility vehicles (SUVs) and luxury cars are in the slow lane as the demand for high-end automobiles has fallen significantly amid the ongoing economic crisis, according to market players.

The government, businessmen and high officials of the corporate sector are the major clients of this segment of the vehicles but they are also spending less because of the surging prices of the vehicles resulting from a massive depreciation of the taka in the last one and a half years.

The austerity measures taken by the government also contributed to a decline in the sales of luxury cars.

SUV and luxury car sales slipped to 635 units per month since January this year compared to 853 units last year, as per data of the Bangladesh Road Transport Authority.

The government, businessmen and high officials of the corporate sector are the major clients of luxury vehicles but they are also tightening their belt because of surging prices

Market players say the demand for high-end automobiles is dominated by the Toyota Land Cruiser, which accounts for about 60 per cent of sales in the premium segment.

Meanwhile, the Mitsubishi Pajero is the second most popular model with a 20 per cent share.

Md Shafiqul Islam, head of operations at HNS Automobiles, said their SUV and luxury car sales have reduced by an average of 26 per cent year-on-year in the past eight months.

The company imports and retails reconditioned models of Japanese automobile brands.

"Even premium customers are not purchasing high-end cars considering the higher prices amid the liquidity squeeze," he added.

Islam said another reason for the lower sales is that in some cases, people are unable to find their required model as imports have declined significantly for difficulties in opening LCs.

He also said car prices have increased by some 25 to 30 per cent as Bangladesh's taka was devalued by about 26 per cent against the US dollar due to shortages of the greenback over the past year.

Echoing the same, Safayet Bin Taiyab, country lead (sales) at Progress Motors Import Ltd, said they have been able to sell just six or seven units per month since November 2022, down from 12 units previously.

Imports by Progress Motors, the local distributor of German brand Audi, also declined due to difficulties in opening LCs. This includes having to deposit an extra 15 to 20 per cent security margin alongside 100 per cent advance payment against their purchase.

Additionally, the newly imposed carbon tax for people owning a second car has had a negative impact on premium customers and thereby reduced demand in the high-end segment, he said.

Redwanul Zia, chief executive officer at Rancon Motors Limited, the sole authorised distributor of Germany's Mercedes-Benz in Bangladesh, said their monthly sales have declined by around 60 per cent.

According to him, they now sell two to three units per month while it was around eight units previously.

Zia pointed out that a Mercedes-Benz car currently costs Tk 50 lakh to Tk 60 lakh more than before due to inflation in Europe coupled with the devaluation of the local currency.

"So, these models have become more expensive and therefore less accessible for potential buyers," he said, adding that the high-end vehicle segment is in a tough situation due to the dull market.

On the other hand, sales of cars made by BMW, another German automobile company, increased by around 17 per cent over the past eight months as customers shifted away from other brands.

Executive Motors, a concern of Meghna Group, retails several models of BMW cars with prices ranging from Tk 90 lakh to Tk 4.20 crore.

Abdur Rahman, head of sales at Executive Motors, said they sell seven to eight units each month at present while the previous best was just six units.

With this backdrop, Executive Motors yesterday launched the highly anticipated BMW X1 model, which is a sports activity vehicle (SAV).

With a price of Tk 1.02 crore, the all-new BMW X1 is powered by a compact 1.5-litre engine featuring the company's twin power turbo technology in front-wheel drive.

The engine is paired to a seven-speed with double-clutch transmission, delivering 136 horsepower.

As such, the SAV accelerates from zero to 100 kilometres per hour (kmph) in just 9.2 seconds and reaches a maximum speed of 208 kmph.