[🇧🇩] Automobile Industry of Bangladesh including parts

[Saif]

Jaecoo and Omoda are sub-brands of Chery cars from China. As such quality should not be too bad. For myself - Chinese cars are still a bit of a question mark. More sold on major global brands.

Bangladesh has been importing Japanese cars since its independence but Japan hasn't established car manufacturing plants in Bangladesh so far. The Govt. should open the local automobile market for China and restrict Japanese cars in the market. This way we would be able to draw huge Chinese investments in our automobile sector. What do you say?

 

[Saif]

Bogura emerging as a hub for used automobiles

A major hub for the sale and repair of motor vehicles has gradually emerged in Bogura over the past two years, drawing an estimated investment of Tk 1,000 crore.

www.thedailystar.net

Bogura emerging as a hub for used automobiles

A five-kilometre stretch of road along the Baragola-Matidali highway in Bogura has quickly turned into a hub for automobiles, with numerous showrooms and auto-repair workshops offering their services. The biggest draw, however, remains used cars, which can be bought for cheaper prices than in Dhaka. Photo: Mostafa Shabuj

A major hub for the sale and repair of motor vehicles has gradually emerged in Bogura over the past two years, drawing an estimated investment of Tk 1,000 crore.

At least 15 showrooms and 20 workshops offering repairing services have been established along a five-kilometre stretch on the Baragola-Matidali highway.

New and reconditioned vehicles of renowned brands, including BMW and Mercedes-Benz, are also available here.

However, cars that have changed ownership multiple times are a big draw, with overall monthly sales reaching at least Tk 10 crore.

To read the rest of the news, please click on the link above.​

 

[Bilal9]

Luxury sleeper bus bought by a bus transport operator from Pabna, which is a second-tier town in Bangladesh. They have four in the fleet now.

Each of these Made in Bangladesh buses cost 49 lakh to build, both of them added up to one crore. The buses boast upholstered luxury leather beds and articulating seats.

 

[Saif]

Luxury sleeper bus bought by a bus transport operator from Pabna, which is a second-tier town in Bangladesh. They have four in the fleet now.

Each of these Made in Bangladesh buses cost 49 lakh to build, both of them added up to one crore. The buses boast upholstered luxury leather beds and articulating seats.

I guess people have to pay hefty bus fares to travel in these luxurious buses.

 

[Bilal9]

I guess people have to pay hefty bus fares to travel in these luxurious buses.

Yes that is the case. People's disposable income has gone up considerably, so they can afford to pay these kind of fares, even riding luxury sleeper buses to 2nd and 3rd tier towns.

 

[Saif]

Malaysia can fully manufacture Perodua car in Bangladesh: PM

Prime minister Sheikh Hasina on Wednesday invited Malaysia to set up facilities to fully manufacture their Perodua brand car in Bangladesh...

www.newagebd.net

Malaysia can fully manufacture Perodua car in Bangladesh: PM
Bangladesh Sangbad Sangstha . Dhaka 25 July, 2024, 00:04

Prime minister Sheikh Hasina on Wednesday invited Malaysia to set up facilities to fully manufacture their Perodua brand car in Bangladesh.

She made the call when outgoing Malaysian high commissioner here Haznah Md Hashim paid a farewell call on her at her office this morning.

In the meeting, the envoy said that local PHP Motors was assembling Malaysian brand, Perodua car here.

Prime minister's press secretary Md Nayeemul Islam Khan briefed the reporters after the meeting.

PHP Motors, a concern of PHP Family, has tied up with Perodua, a top Malaysian automobile brand, to assemble their cars and SUVs in Bangladesh and sell those in the local market.

In the meeting, the premier and the envoy also talked and remembered the longstanding and continuing relationship between two countries from the tenure of father of the nation Bangabandhu Sheikh Mujibur Rahman.

About the issue of anarchic situation unleashed by BNP-Jamaat behind the quota reform movement of student, Hashim told the premier that, 'I've confidence in your ability in handling the current situation. You're tackling the situation well and it is purely Bangladesh's internal matter.'

'She (the envoy) sees everything is under control,' said the press secretary quoting the envoy as saying.

The high commissioner said that Malaysian business entities' cumulative investment rose to $5 billion in Bangladesh, which mainly propelled by the two telecommunication companies- Robi and Edotco Bangladesh as they reinvested their profits here.​

 

[Saif]

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

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

www.thedailystar.net

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.​

 

[Saif]

Automobile sales drop amid economic downturn, political jitters

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.

www.thedailystar.net

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.​

 

[Saif]

Luxury car sales slow to a near-stop

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.

www.thedailystar.net

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.​

 

[Saif]

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

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.

www.thedailystar.net

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.​

 

[Saif]

পোশাকের পর বাংলাদেশে তৈরি হওয়া মোটরসাইকেল এখন কাঁপছে আমেরিকার বাজার

 

[Vsdoc]

Bangladesh motorcycle industry and ecosystem, both products and ancillaries, is in stark contrast to the same in Pakistan, and more than anything else highlights the benefits accrued from having a non hostile if not friendly relationship with India. Simply walk out on to the streets of both countries and see the bikes junta in both countries are riding. About 30 years difference in generation terms.

Tagging my fellow doc biker buddy @VCheng here.