[🇧🇩] Automobile Industry of Bangladesh

Assembled by Meghna, three brand new KIA SUVs hit the road


Meghna Automobiles is all set to roll out three models of KIA cars that are being assembled at its factory in Barmi of Gazipur. The three models are all sport utility vehicles with engine capacities of 1,500cc to 2,000cc. PHOTO: COLLECTED

Meghna Automobiles, the automotive arm of Meghna Group, began selling three locally assembled sport utility vehicles (SUVs) of South Korean automobile manufacturer KIA recently.

According to officials, the official launch of the three cars is scheduled to be held soon.

The SUVs are the 1,500cc Seltos, 1,500cc Carens, and 2,000cc Sportage, said Anisuzzaman Choudhury, executive director of Meghna Automobiles.

The Seltos and Carens models were showcased at the Dhaka Motor Show in May this year.

Choudhury said Meghna Automobiles has already obtained type certification for the cars from the Bangladesh Road Transport Authority (BRTA).

Type certification is a mandatory specification for locally assembled cars to be sold in the market.

"We are now ready to launch the vehicles officially," he said. "Our goal is to provide brand-new passenger cars at a lower price than it would cost to import."

Meghna Automobiles established its assembly plant for completely knocked down (CKD) cars on 15 acres of land at Barmi union of Gazipur at a cost of Tk 275 crore, which is equivalent to around $25 million.



According to Choudhury, the price of locally assembled Seltos is around Tk 43 lakh compared to around Tk 52 lakh for those imported as completely built-up (CBU) units.

Similarly, the locally assembled Sportage costs Tk 58 lakh while the CBU unit is priced at Tk 78 lakh.

Choudhury said prices of brand-new locally assembled cars are expected to be Tk 10-12 lakh lower than those imported as CBU units.

However, the sharp depreciation of the local currency taka against the US dollar has limited the price drop to only Tk 8 lakh per unit, he said.

As per Bangladesh's automobile policy, there are lower customs duties on importing various components of vehicles for assembly purposes, he added.

Regarding the quality of locally assembled KIA cars, Choudhury said Korean engineers and technicians would operate the Gazipur assembly plant for the first two years to ensure original quality.

By that time, local engineers and technicians will have built up efficiency and ensured quality, he said.

Currently, Hyundai, South Korea's leading automobile manufacturer, Malaysian automotive company Proton, and renowned Japanese manufacturer Mitsubishi assemble passenger cars in Bangladesh.

According to market insiders, imported reconditioned Japanese cars dominated the local automobile market while brand-new cars hold around 18 percent of the market share.

Referring to market assessments, Choudhury said brand-new cars would dominate the market by 2030 as user awareness and affordability increase.

He said customers do not need to renew the fitness certificate for five years after the purchase of a new car. In contrast, reconditioned cars require annual fitness certificate renewals.


According to BRTA data, an average of 22,000 to 24,000 passenger vehicles, have been sold per year since 2014.

Choudhury said KIA and Meghna Automobiles teamed up to assemble cars in Bangladesh after observing the growing market for brand-new cars, focusing on SUVs to capture the expanding market.

According to him, Meghna Automobiles has the capacity to assemble 7,000 cars per year but will initially assemble 3,500 units per year.

Besides, Meghna will ensure the availability of spare parts and sufficient service centres across the country.​

Automobile sales drop amid economic downturn, political jitters

Automobile dealers have seen their sales decline almost 70 percent since July as political turmoil and economic concerns weigh on consumers’ minds. High interest rates on auto loans and a lack of law and order are other reasons for the drastic fall in sales. Photo: Star/file

Automobile sales have dropped substantially since July this year amidst the economic downturn and political turmoil, denting any hopes of recovering from last year's slump, according to market insiders.

Although credible data is hard to come by, vehicle dealers estimate that monthly sales have fallen by at least 70 percent.

In other words, around 400 to 450 vehicles were sold per month since July compared to 1,700 to 1,800 in the first six months of the year.

One way of verifying sales is through the number of vehicles registered with the Bangladesh Road Transport Authority (BRTA).

Around 1,747 automobiles were registered on an average per month in the January-June period this year. However, data for the subsequent months is yet to be made available.

In 2023, 8,549 were registered in total. The number stood at 23,651 in 2022.

Needless to say, these figures exclude a small fraction of people who delay registering new vehicles.

Although normalcy has been returning since the interim government came to office following the ouster of the Awami League government on August 5, potential buyers may prefer waiting it out a bit longer, according to the vehicle dealers.

"We did not imagine that this type of dull market could suddenly come about," said Shafiqul Islam, head of operations at HNS Automobiles.

"We expected sales to grow this year, but the sudden political change has reversed the calculations of the market," he said.

Besides, the Japanese yen has grown stronger against the US greenback, increasing duties and turning vehicles costlier. Prices have increased by Tk 1 lakh to Tk 1.5 lakh in the last two months, Islam added.

High interest on auto loans is also discouraging purchases while dealers are refraining from releasing imported vehicles from the Chattogram port due to a capital shortage, he said.

Bank loans are also big burdens for vehicle dealers, he said.

Monthly sales have declined by around 70 percent since July due to the political changeover and people's apprehensions about the economy, said Habib Ullah Dawn, president of the Bangladesh Reconditioned Vehicles Importers and Dealers Association (BARVIDA).

Nowadays, people are mostly purchasing sedans such as Toyota Axios and Corollas. The sales of SUVs have been very slow, Dawn said.

Potential customers are taking time to observe the situation before deciding to make a purchase, he said.

Besides, law and order are yet to be fully restored, he said, adding: "If there is a big improvement in the situation, the market will change within the next three months."

According to Dawn, the situation is improving, which is good news for the car market.

He also pointed out that dealers were facing challenges in paying staff salaries and showroom rent due to the drop in revenue.

"We suffered a lot during the Covid-19 pandemic but recovered rapidly, so we are optimistic of recovering from these ongoing difficulties," he said.

Arif Khan Bipu, managing director of Motors Bay, an importer and retailer of reconditioned Japanese cars, said importers and retailers with large-scale operations had suffered a larger drop in sales compared to smaller ones.

According to him, sales of the big retailers declined by 70 percent since July whereas it was around 40 percent for small retailers like him.

He said the overall market situation was not favourable for the purchase of passenger vehicles by middle-income people due to the ongoing transitional period for politics and economic turmoil due to high inflation and high auto loan interest rates.​

Luxury car sales slow to a near-stop
Market players blame economic and political uncertainty



Sales of luxury sedans and sport utility vehicles (SUVs) have been almost nil since July this year as customers have reined in spending amid the ongoing economic downturn and sudden political changeover in Bangladesh.

According to various market insiders, sales have fallen by about 95 percent from around 800 units per month before August 5, when the Sheikh Hasina-led Awami League government was ousted by a mass uprising.

And although there is no credible data to back up this claim, Bangladesh Road Transport Authority (BRTA) data shows that around 734 SUVs were registered each month between January and September 2024.

However, there were no individual statistics on the registration of other types of premium cars as the BRTA tallies sedans in the normal vehicle class.

Besides, these figures exclude a small fraction of people who delay registering new vehicles.

Saad Nusrat Khan, managing director of Progress Motors, said they have not sold even a single car since July although they normally sell around eight units per month.

Citing that there has been no footfall at their Tejgaon outlet amid the political shift and economic uncertainty, Khan informed they have incurred losses of around 1 crore since July.

Furthermore, they have to sell at least six units per month to cover operational costs.

Khan also voiced concerns about overall sales in the premium segment falling further as the BRTA recently imposed a carbon tax on electric vehicles even though they do not cause carbon emissions.

Progress Motors, the country's sole distributor of luxury vehicles designed by German automaker Audi AG, sells cars for between Tk 1.69 crore and Tk 3.99 crore.

As such, only the affluent class buy these cars.

But as business activities have slowed amid the prevailing economic downturn, they are not in the mood to spend such large sums of money on luxury items, Khan said while also blaming the lack of political stability for slowing sales.

Habib Ullah Dawn, president of the Bangladesh Reconditioned Vehicles Importers and Dealers Association (Barvida), said luxury car sales have declined significantly since July as people have become apprehensive about the economy following the political changeover.

"They [customers] are in a panic about what may happen in the future," he added while pointing out that potential buyers are observing the situation before deciding on their purchase.

Dawn also said people are mostly purchasing comparatively cheaper sedans, such as the Toyota Axio and Toyota Corolla, rather than high-end units like the Toyota Camry and Toyota Crown.

Meanwhile, sales of SUVs like Toyota's Land Cruiser, Pajero and Harrier series are almost nil.

Additionally, the Barvida president said repeated depreciation of the local currency against the US dollar alongside import duty hikes have increased the cost of vehicles with higher engine capacity.

As a result, the prices of such cars increased by Tk 3-4 lakh over the past two months, he added.

Dawn also said it is good news for them that the law and order situation is improving day by day as customers will feel more comfortable visiting their showrooms.

Pointing out that car traders are struggling to pay operational costs due to reduced revenue, he said they are optimistic about making a rapid recovery, just as they had after the Covid-19 pandemic.

"Nobody imagined this type of dull market would suddenly come about," said Shafiqul Islam, head of operations at HNS Automobiles.

He said customers, particularly in the premium segment, preferred SUVs over sedans until the recent political changeover reversed this trend.

Also, the high interest rate on auto loans could be discouraging purchases, Islam added, saying that some dealers have been unable to release their previously imported vehicles from Chattogram port due to a lack of sufficient capital.

Arif Khan Bipu, managing director of Motors Bay, said sales in the normal segment are also declining as people have been grappling with inflationary pressure for more than two years.

Citing that the recent political changeover adversely impacted the market, he said the overall situation is not favourable for high-end car sales as potential customers are being financially cautious.​

Wheels of change: Bangladesh’s journey to self-sufficiency in motorcycle manufacture

Photo: Anisur Rahman

It was once beyond anyone's wildest imagination that Bangladesh would become a motorcycle manufacturing hub. Only seven years ago, the country relied on imports to meet 95 percent of its demand for motorbikes.

However, the situation has reversed completely, with the initial kick-start being provided through policy support.

Today, around 99 percent of the two-wheelers plying the roads are either manufactured or assembled locally, according to industry players.

This transformation from an importer to a local assembler and manufacturer has not only saved valuable foreign currencies but also created thousands of jobs.

However, despite this progress and the industry insiders' belief that the market would grow manifold in the next two to three years, motorcycle sales in Bangladesh hit a five-year low in 2023 due to historic inflationary pressures.

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 the downturn during the Covid-19 pandemic.

The government gave go-ahead to numerous policies to facilitate the motorcycle manufacturing industry's development in the past, with hopes of diversifying its apparel-dominated export basket.



The turnaround truly began in 2016–17, when the import duty on completely knocked down (CKD) motorcycle units was slashed by 25 percentage points to 20 percent to encourage local assembly. The emergence of ride-sharing platforms gave further impetus to the sector.

So far, about Tk 10,000 crore has been invested in the sector, directly and indirectly creating employment opportunities for around two lakh people.

According to data from the Bangladesh Motorcycle Assemblers and Manufacturers Association (BMAMA), there are 10 motorcycle factories in the country, three of which are currently not operating.

Seven firms, namely Japanese brands Honda, Suzuki, and Yamaha, Indian brands Bajaj, TVS and Hero, and local brand Runner Automobiles, are running their units fully and have made the country nearly self-sufficient in motorbike manufacturing and assembly.

Although motorcycle prices reduced significantly due to local assembly and manufacturing, those reductions have eroded over the past two years due to the depreciation of the local currency against the greenback, according to Biplob Kumar Roy, chief executive officer of TVS Auto Bangladesh Ltd (TVS ABL).

Assuming the price of a motorbike is Tk 1.30 lakh on an average, the total sales figure would stand at around Tk 5,850 crore a year, almost equivalent to the market size of passenger cars.

Local motorcycle production began in the country at the turn of the millennium, with Walton making the country's first motorcycle. However, it decided to shutter that project.

Runner Automobiles was the second company to begin manufacturing motorcycles in Bangladesh, making its foray into the market in 2012.

Hafizur Rahman Khan, chairman of Runner Automobiles and also president of the Bangladesh Motorcycle Manufacturers and Exporters Association, said the motorcycle market will grow further once the political and economic situation stabilises.

The sector also faces challenges as the use of electric motorcycles increases over time. "So, we are planning to develop battery-run motorcycles for the local market," he said.



Runner Automobiles makes almost all components except some basic parts of the engine, he said, also emphasising on developing backward linkages, which are vital to expanding capacity.

There is even the possibility that the market for low-end bikes may reduce in the future as manufacturers are updating features continuously, he said.

Subrata Ranjan Das, executive director of ACI Motors, said the mindset of the customers is changing and they are moving to high-end motorcycles.

Against this backdrop, customers have shifted to Japanese brands from Indian brands over the past two to three years. However, he said Indian brand Bajaj is still dominating the market with its high-end models.

This is because the price difference between Indian and Japanese brands is nominal. So, customers prefer Japanese bikes due to the brand image.

Another local assembler and manufacturer, TVS ABL, introduced bikes in Bangladesh in 2010 and set up a manufacturing and CKD plant in 2017 with a capacity to churn out 500 units during each eight-hour shift.

Biplob Kumar Roy, chief executive officer at TVS ABL, said sales of motorcycles declined over the past year as people's purchasing power was eroded by inflationary pressures and an unstable macroeconomic outlook.

He said the growth of the market had stagnated for the time being, but expected it to pick up in the future.

He said that customers are not only moving towards Japanese bikes but they also prefer high-end Indian bikes.

He suggested the government reduce value-added tax (VAT) at the customers' end to make the sector healthier. "Banks can also offer finance for buyers similar to auto loans," he said.

Despite the rise of Japanese brands, the market leader in the motorcycle segment remains Bajaj, holding around a 30 percent share. It manufactures 12,000 units per day at its Zirani factory in Savar.

According to officials of Uttara Motors, the sole distributor of Bajaj motorbikes, the company has sold around 25 lakh units over the past four decades.

Most models are available in Bangladesh either through manufacturing or assembly and the quality is the same as those made in India.

Another Indian company, Hero, one of the fastest-growing brands in Bangladesh, established an assembly plant in 2015 under a joint venture with the Nitol-Niloy Group.

The facility was upgraded to a manufacturing unit in 2018.

The plant manufactures 125,000 units per year against a capacity of more than 200,000. It also makes 22 components, including chassis, rims, and drive chains.

Japanese automobile giant Honda also rolled out a motorcycle manufacturing plant in November 2018.

Bangladesh Honda Private Ltd (BHL), a subsidiary of Honda Motor Co Ltd, also started export operations to contribute to both local and international markets.

The company recently exported its X-Blade model to Guatemala, first by air in January and then by sea, with plans for further exports to South America, Central America, and Africa.

Shah Muhammad Ashequr Rahman, chief marketing officer of the company, noted the team's efforts in showcasing Bangladesh's manufacturing capabilities on the global stage, reinforcing BHL's commitment to growth and innovation.

Challenges for component manufacturers

Local companies showed courage in making motorcycle components with a view to cutting the country's reliance on imports, but recent complexities in opening letters of credit (LCs) forced many to cease operations.

At least four companies manufactured components in Bangladesh.

Among them was QVC Bangladesh, located in Sundarban Union in Dinajpur. The company would produce around 2.5 lakh drive chains every year, with a capacity of about 5 lakh.

However, it had to stop production three months ago, as banks were not cooperating in opening LCs for raw material imports.

ATM Shamsuzzaman, managing director of QVC Bangladesh, set up the facility that manufactured drive chains in 2014 after seeing the potential of the motorcycle market.

He invested around Tk 35 crore to set up the factory, which employed around 200 people.

However, Shamsuzzaman was left with little choice but to shutter the unit as banks were uninterested in opening LCs.

"The factory was my dream. I invested everything. But with the shortage of US dollars and the price increase of the greenback, my factory became ailing," he added.

A motorcycle requires more than 700 components and the local light engineering industry can make four, namely drive chains, seats, stands, and batteries.

At first glance, this may seem like a drop in the bucket, but producing components locally marks a major stride compared to a decade ago when the industry relied completely on imports.

QVC Bangladesh would supply drive chains to Grameen Motors, Runner Automobiles and state-run Atlas Bangladesh.

"I decided to sell the factory, including land, as it became a burden for me," Shamsuzzaman said.

Md Tazul Islam, president of the Automobile Components & Accessories Manufacturers Association, said Bangladesh could manufacture all motorcycle components as local vendors had all the resources.

Islam was the managing director of Run Industries, a company that manufactured motorcycle seats until recently. It has now shut down production due to a lack of necessary raw materials.

According to him, the growing demand for two-wheelers and the Motorcycle Industry Development Policy 2018 inspired local component makers.

Set up at Sibrampur in Faridpur in 2009, the company was the sole seating solutions provider for Runner Automobiles and Hero Motorcycle.

It would sell more than 2 lakh seats to Runner and Hero combined and had an annual production capacity of 18 lakh.

He alleged that the government, particularly the National Board of Revenue, did not pay attention to local vendors and has not cooperated to develop any small and medium businesses in the industry.

BHL's Ashequr Rahman added that manufacturing generated the most robust backward linkage industries through vendors across all sectors of the economy.

He noted that the expansion of the motorcycle industry may encourage the growth of the parts, components, and supporting industries and technical consulting services.

However, he said backward linkages had not been developed in Bangladesh.​

Ifad Autos exporting AC bus to Bhutan

Ifad Autos has become the first local automobile company to export airconditioned (AC) buses assembled in Bangladesh.

The company started shipping 11 of the buses to Bhutan this week and will send 11 more within this month. Ifad has achieved a historic milestone for the automobile industry of Bangladesh, said Iftekhar Ahmed Tipu, chairman of Ifad Group.

Ifad has its own manufacturing plant, where the body of the AC buses were made.

"The bus export was really a matter of pride for Bangladesh, as the country has always imported this type of vehicles," he added.

Apart from Bhutan, Maldives, Nepal, Myanmar and India's seven-sister states have also showed interest in buying AC and non-AC buses from Ifad, Tipu said. The chairman of the automobile company thinks his company will be able to export buses to many more countries if it is provided with government support.

According to Tipu, a revolutionary change has been achieved in the field of heavy vehicles in Bangladesh over the past few years.

Ifad Autos has set up a car manufacturing plant as the country spends a huge amount of foreign currency every year for car imports, he said.​

Policy support needed to boost EV industry: experts
Staff Correspondent 08 November, 2024, 22:51

Experts on Friday underscored the need for specific policy support from the government in terms of research and development, capacity building, import duty reduction and technology adaptation to boost local electric vehicle or EV industry.

They came up with the comment at a seminar titled ‘Electric Vehicle Industry of Bangladesh: Policy - Challenges – Prospects’ organised by Sevour International Limited at International Convention City Bashundhara in the capital Dhaka on the day.

The speakers discussed the future of Bangladesh’s transportation sector for improving sustainability, specifically regarding adoption of electric vehicles and promotion of environmentally friendly transport solutions, according to a press release.

Shish Haider Chowdhury, Information and Communication Division secretary of the Ministry of Posts, Telecommunication and Information Technology, said that use of EV was significant in different countries, including EU, USA and China, and about 80 per cent vehicles in Norway and Sweden comprised of EV while in China, it was 25 per cent.

‘We have to keep pace with the world. We need a lot of research and building capacity as well as specific policy to grow the EV industry in Bangladesh. We also need more consultation with stakeholders to overcome challenges. We have to patronise the industry. Otherwise it may stumble,’ he added.

Shish Haider also said that he would talk about the industry with the government’s higher level, including the National Board of Revenue and customs department, to resolve the problems.

Abdul Matlub Ahmad, president of the Bangladesh Automobiles Assemblers and Manufacturers Association and Bangladesh Electric Mobility Association, sought zero duty on imports of EVs and its parts for the next three years for the sake of the industry’s development.

‘There will not be found any diesel or octane run vehicles in next 20 years. So, we should think about the matter and take proper policy now,’ he added.

Ahsanullah University of Science and Technology vice-chancellor Md Ashraful Hoque emphasised on industry and academia collaboration.

Hafizur Rahman Khan, vice-president of BAAMA, Sk Aminuddin, director of Akij Group and chief executive officer of Akij Motors, Md Ehsan, mechanical engineering department professor of Bangladesh University of Engineering and Technology, and Nasima Jahan B Binty, managing director of Blue Solutions Limited, among others, were present.​

Yamaha celebrates 8 years with ACI Motors
FE Online Desk
Published :
Nov 17, 2024 20:36
Updated :
Nov 17, 2024 20:36



The renowned motorcycle brand Yamaha has successfully completed 8 years in Bangladesh through its partnership with ACI Motors.

In 2016, the iconic Japanese brand entered the Bangladeshi market under the collaboration with ACI Motors. Since then, Yamaha and ACI Motors have gained immense popularity by providing customers with advanced technology motorcycles and ensuring top-notch after-sales services, according to a media release.

Besides, Yamaha and ACI Motors have been actively working to raise road safety awareness and provide training for aspiring riders.

On the occasion of Yamaha’s 8 years completion, a grand day-long celebration was held on November 15, 2024, at Momo Inn Park and Resort in Bogura.

More than 1,500 motorcycle riders and members of the Yamaha Riders Club from different parts of the country participated in the event. Popular Bangladeshi band Artcell performed at the event which added charm to the festivities.

The event was graced by the presence of the Executive Director of ACI Motors, Mr. Subrata Ranjan Das, along with higher officials from Yamaha and ACI Motors.

Additionally, Yamaha's 8th anniversary was celebrated across all its showrooms nationwide, with active participation from Yamaha Riders Club members and loyal customers.​

Govt to take steps to modernise Pragati Industries Ltd: adviser
Staff Correspondent 03 December, 2024, 01:15


The adviser to housing and public works, and industries ministries, Adilur Rahman Khan, visits the lone government-run car manufacturer, Pragati Industries Limited, at Sitakunda in Chattogram. | Press release photo

The adviser to housing and public works, and industries ministries, Adilur Rahman Khan, on Sunday said that the interim government would take steps to modernise the only government-run car manufacturer, Pragati Industries Limited.

He made the remark while inquiring about the overall activities of the car manufacturer at Sitakunda in Chattogram, said a press release.

He also inaugurated the marketing activities of the Korean Kia’s Cerato Sedan car, which was assembled for the first time at the factory.

Senior secretary of the of industries ministry Zakia Sultana, chairman of Bangladesh Steel and Engineering Corporation Mohammad Moniruzzaman, managing director of Pragati Industries Limited Abul Kalam Azad, among others, were present during the visit.

Earlier, after planting trees, Adilur Rahman inaugurated the Pragati 3S Centre activities in Nasirabad, Chattogram.​

High registration cost, taxes slow Bangladesh’s shift to cleaner EVs

Despite the country's efforts to reduce pollution and transition to cleaner cars, electric vehicle (EV) sales are yet to pick up due to multiple factors, including taxes and high registration costs, which sellers describe as "impractical".

Importers said that the Bangladesh Road Transport Authority (BRTA) calculates the registration fee for a modest 150-kilowatt EV equivalent to that of a 3,000cc car -- roughly comparable to high-end fossil fuel-burners like the Mitsubishi Pajero or Toyota Land Cruiser.

EV buyers, who already own a car, are also subject to an annual surcharge of Tk 1 lakh for the EV.

Collectively, these factors contribute to lower-than-expected EV sales, as high registration fees based on kilowatt power increase the purchase price.

"Even though EVs are highly economical and environmentally friendly, the BRTA method of calculating EV registration fees is impractical and discourages EV purchases," said Saad Khan, managing director of Audi Bangladesh, the sole distributor of German high-end automaker Audi.

In September 2022, the BRTA introduced the EV registration guidelines. In January 2023, Audi Bangladesh became the first to officially begin selling EVs in Bangladesh.

At least seven brands, including BMW, Mercedes-Benz, Audi, BYD, Chery and MG have introduced EVs to the Bangladeshi market, aligning with the government's efforts to promote low-carbon-emission vehicles

According to Khan, they have sold 48 EV units in the past two years. Audi Bangladesh currently offers three EV models, priced between Tk 1.69 crore to Tk 2.25 crore.

At least seven brands, including BMW, Mercedes-Benz, Audi, BYD, Chery and MG have introduced EVs to the Bangladeshi market, aligning with the government's efforts to promote low-carbon-emission vehicles, he added.

The Audi Bangladesh managing director said the BRTA calculates registration charges based on the kilowatt power of EVs, equating 20cc of engine capacity to each kilowatt. This calculation leads to high registration costs.

He said EV dealers recently requested the National Board of Revenue (NBR) to reduce import tariffs and duties on completely built-up (CBU) EVs to lower prices and boost the EV market.

"We suggest reducing the import tariff for CBU EVs to 37 percent from the current 89.1 percent," he said.

Khan cited examples of neighbouring countries imposing import duties from as low as 25 percent to charging nothing at all on EVs.

"We believe that a lower tariff rate can positively impact government revenues through increased vehicle sales as they become more affordable," Khan wrote to the NBR.

The EV dealers also said letter of credit (LC) margins for vehicle import were increased from 10-20 percent to 100 percent in July 2022 in the face of a forex crunch.

With reserves now stable, they recommended removing the LC margin restrictions on EVs to encourage imports.

"The registration fee for an electric vehicle is at least Tk 3-4 lakh and the one-time advance income tax is at least Tk 1.5 lakh, which is a massive burden for buyers," said Chowdhury Mohammad Nabil Hasan, head of marketing at Rancon Motors, the distributor of Mercedes-Benz EVs in Bangladesh.

Hasan said EVs are highly economical, with electric bikes capable of driving up to 400 kilometres on a single charge.

"If we calculate the current electricity price per unit, the cost per kilometre is only Tk 2, which is very cheap compared to fossil fuel-based vehicles," he said.

According to him, EV sales will grow with the expansion of charging station networks and increasing consumer awareness regarding EVs.

"We have already built 18 charging stations in Dhaka, Cumilla, Chattogram, and Cox's Bazar under the brand Charge Easy," he added.

Mercedes-Benz currently sells about seven EV models in Bangladesh, catering to high-end consumers who prefer the German automaker.

Md Tauhidul Islam Tushar, deputy director (Engineering-1) at BRTA, said they have recommended a 50 percent reduction in advance income tax (AIT) to the ministry to lower registration fees considering environmental benefits.

"The BRTA has also recommended reducing the surcharge on EVs, and we expect the NBR to waive this charge," he said.

As of September 30, 281 EVs were registered with the BRTA, and this figure is expected to exceed 300 by the end of the year, Tushar added.

Despite growing car use, per capita car use in Bangladesh is very low compared to comparator countries.

Bangladesh has three cars per 1,000 people, compared with 897 per 1,000 in Malaysia, showed a research paper of the Policy Research Institute of Bangladesh, a think-tank. It is 34 in Vietnam, 22 in India, and 16 in Pakistan.​

Japan’s Mitsui buys 18.5% stake in ACI Motors for $22.75m

Mitsui & Company, one of the largest general trading companies in Japan, has bought an 18.5 percent stake in ACI Motors Limited for $22.75 million.

The purchase was made from two investors of the Bangladeshi company through a Singaporean subsidiary on November 29.

The sale proceeds will be received as foreign direct investment, according to Subrata Ranjan Das, executive director of ACI Motors Limited.

Mitsui says it generates an annual revenue of over $100 billion from operations spanning trading, logistics and financing, infrastructure, energy, mobility, chemicals, iron and steel products, food and retail management, wellness, IT and communication, and corporate development.

Launched in 2007 focusing on agricultural mechanisation, ACI Motors now assembles and sells, among others, agricultural and construction machinery, commercial vehicles, motorcycles, and marines diesel engines of brands Yamaha, Yanmar, Sonalika, and Foton.

ACI Group is one of the largest conglomerates in Bangladesh with diverse interests in the fields of mobility, pharmaceuticals, nutrition and agriculture, food, consumer products and retail.

Two senior executives from Mitsui will now join ACI Motors as a part of efforts to grow the business in the global market by using the worldwide connections of the Japanese company, said Das.

ACI Motors, a subsidiary of ACI Group, intends to boost its growth by entering new markets and diversifying its range of products to include rice processing equipment and electric and passenger vehicles, Das said.

Mitsui will further expand its activities in areas such as retail and logistics and contribute to Bangladesh's rapidly growing market through integrated mobility and mechanisation solutions for agri-businesses, transportation, and infrastructure, according to a statement.​