Motorcycle sales in Bangladesh hit a five-year low in 2023 following a gradual decline due to global economic crises and inflationary pressure, according to industry people.

As per a market assessment by ACI Motors, motorcycle sales fell 28 percent year-on-year to 461,805 units in 2023, with the decline even exceeding what was witnessed during the Covid-19 pandemic.

Subrata Ranjan Das, executive director of ACI Motors, said overall sales declined due to the ongoing economic situation at home and abroad.

"Sales fell as two-wheeler prices rose by an average of 10 percent as a direct impact of the ongoing US dollar crunch coupled with inflationary pressure," he added.

However, he said sales of high-end motorcycles posted year-on-year growth of around 13 percent in 2023 as customers of the premium segment remain unaffected by the current economic climate.

Das added that as the overall economy is in a downward trend, motorcycle manufacturers and retailers have no scope to expand their market until the situation improves.

Sales of ACI Motors, the local distributor of Japanese brand Yamaha, grew by about 12 percent year-on-year to 70,046 units in 2023, the market assessment shows.

On the other hand, two-wheeler sales of other brands, including TVS, Honda and Runner, fell by an average of 22 to 44 percent at the same time.

Shah Muhammad Ashequr Rahman, head of finance and commercial at Bangladesh Honda Private Limited (BHL), said there is no chance to revive sales to adequate level within the first half of 2024.

Against this backdrop, he said the government should temporarily reduce the registration fee and customs duty for motorcycles in order to improve their affordability.

At present, the Bangladesh Road Transport Authority charges Tk 10,000 for registering a motorcycle for a two-year period while it costs Tk 22,000 for a 10-year period.

"This should be reduced to bring the price of motorcycles within the affordability of general customers and thereby give relief to the industry," Rahman added.

And citing how the current tariff regime is impacting sales by inflating prices, he said the import duty on scooters should be brought down to 89 percent from 113 percent.

The BHL is a joint venture between Japan's Honda Motor Co and the state-owned Bangladesh Steel Engineering Corporation.

Biplob Kumar Roy, chief executive officer of TVS Auto Bangladesh Limited, the local distributor of India's TVS Motor Company, said their sales fell by around 41 percent to 60,596 units last year.

"We are now running the business amid a tight situation due to the dull market," he added while informing that the company will have to go for lay-offs in order to survive if the situation prolongs.

Roy also said the current economic situation has reduced people's reduced purchasing power, forcing them to spend mainly on necessities rather than luxuries such as personal transport.

Omor Islam, national sales manager of Uttara Motors, said they have lost about half of their lower customer segment, which usually accounts for 60 percent of the overall sales.

So, sales have fallen drastically, he added.

Uttara Motors is the sole local distributor and manufacturer of India's Bajaj Auto Limited.

And according to Omor, Bajaj leads the domestic motorcycle market by contributing roughly 28 percent of the overall sales with 127,928 units in 2023 and 217,180 units in 2022.

Meanwhile, sales in the premium segment have remained the same, he said.

Omor believes sales could revive with the coming of Eid-ul-Fitr as the economy may rebound unless there is prolonged political unrest.