Carmudi examines the current and future state of the automotive industry in Bangladesh and other Emerging Markets.
Carmudi’s report on “The Booming Automotive Industry in Emerging Markets” provides a detailed look into the global state of automotive sales and how car purchasing behaviors have changed due to the drastic increase in internet and mobile penetration, rising GDP, and the emergence of a middle class. The findings in this report are the result of Carmudi’s quantitative surveys conducted online with both car buyers and car dealers, and in-depth interviews with industry influencers throughout Bangladesh.
The State of Global Car Sales
Global automotive sales for 2015 are expected to reach close to $89M, a 2.4% growth from 2014. Emerging markets’ share of global sales will rise from 50% in 2012 to 60% by 2020, while their share of global profits is also set to rise by 10%. When it comes to new cars, purchase intent is strongest in Asia, where 65% of respondents say they will buy new cars in the next two years, compared with 7% who plan to buy used cars.
Growth of Auto E-Commerce
Globally, auto E-Commerce has grown at such a staggering rate that now as many as 80% of new car customers and almost 100% of used car customers begin their car shopping experience online. With internet and mobile penetration significantly growing in emerging markets, the rate of moving the car shopping experience online is beginning to mirror that of Western Markets. In Bangladesh, as one of leading importers of reconditioned cars, 70% of car buyers report using online car classifieds to conduct research on a car before making a purchase.
Changes in Bangladesh Car Sales
The Carmudi study found that around 40% of car dealers in Bangladesh saw no change, and the remaining 60% were equally split, with 30% reporting seeing an increase and 30% reporting seeing a decrease in sales. According to Khaan M. Saakib Us Salehin from RANGS Group and Ahmed Nafiz Naihan from progress Motors, this phenomenon occurred due to high stock, more fierce competition between dealers, and the political instability in the country.
The Shift to Online
Bangladesh has entered a big transition by using both offline and online media. Facebook, arguably the most popular social media platform, is used by over 50% of car dealers in Bangladesh to advertise their listings. Even with the shift to online, 50% car dealers are still majorly focusing on newspapers.
The Future of Car Sales in Bangladesh
As one of the fastest growing and most promising economies in Asia-Pacific according to the Euromonitor International, Bangladesh’s economic outlook is highly promising with an anticipated real annual GDP growth at 7% on average until 2018. With improving road infrastructure and greater household purchasing power in Bangladesh, used car sales are set to accelerate over the next five years. “Car sales will grow significantly only when the tax rate will be in a tolerable state. If the current tax structure remains same the good quality small cars sale will increase”, said Khaan M. Saakib Us Salehin, Marketing Head of the Automotive Division from RANGS Group.
João Pedro Príncipe, Country Manager of Carmudi Bangladesh said, “The automobile industry in Bangladesh is undoubtedly the most invigorating and dynamic one I have ever encountered! Motorcycle sales are skyrocketing, with over 300,000 units sold in 2014 alone. New players are coming to the market every month, in pursuit of this fascinating market, and some are taking the market by assault. Regarding cars, Toyota (especially with the reconditioned models Axio, Allion and Premio) is the undefeated champion. However, it will be exciting to see how long this will last, since I know from secure sources new European brands are arriving in the market this year, at very competitive prices and with irrefusable conditions. The unpredictableness of the market for the next couple of years regarding models’ and brands’ trends is unavoidable. However, one thing is certain – Carmudi will play an increasingly important role in vehicle trade in Bangladesh, especially as more models become available and vehicle buyers need to find a secure, trusted way to compare information and specifications to make smart purchasing decisions, tailored to their requirements.”
Carmudi was founded in 2013 and is currently available in Bangladesh, Cameroon, Congo, Ghana, Indonesia, Ivory Coast, Mexico, Myanmar, Nigeria, Pakistan, Philippines, Qatar, Rwanda, Saudi Arabia, Senegal, Sri Lanka, Tanzania, United Arab Emirates, Vietnam, and Zambia. The vehicle marketplace offers buyers, sellers and car dealers the ideal platform to find cars, motorcycles and commercial vehicles online.