Cars ‘made in Bangladesh’ along the way
With just a 12 months to choose golden jubilee celebrations of independence, Bangladesh is coming to marking an epoch ever sold by manufacturing its make of automobiles with assistance from Japan.
State-run Pragati Industries is set to perform the feat in close cooperation with Japanese automotive giant Mitsubishi Corporation.
The government aims to start plans by finalising within a short while a 2020 Automobile Industry Development Policy, the draft which has already been distributed to stakeholders seeking their opinion.
The objectives were announced by Industries Minister Nurul Majid Mahmud Humayun during a ending up in Ito Naoki, Japanese ambassador to Bangladesh, at the ministry yesterday.
However, the minister didn't disclose when the government plans on starting the manufacture of automobiles and making those obtainable in the local market.
Currently, Pragati assembles cars created by Mitsubishi Motors, while PHP Motors, a sister concern of the PHP Family located in Chattogram, manufactures cars made by Malaysia's PROTON.
Besides, Indian automotive giants Tata Motors and Mahindra & Mahindra recently showed interest in establishing similar partnerships with local manufacturers to seize a bigger slice of the growing Bangladesh automobile pie.
At the moment, about 63 vehicles are sold each day. In 2012, when the market had just started taking off, the daily figure was 29, based on the Bangladesh Reconditioned Vehicles Importers and Dealers Association (Barvida).
In 2019, car sales amounted to Tk 5,000 crore, that was more or less exactly like in the last year.
Bangladesh's thriving automobile sector is continuing to grow 8 per cent normally each year since 2012, said various industry insiders.
According to the draft policy, the country's automobile industry has been regarded as a potentially major industrial sector going back two decades as it has registered impressive total annual compound growth and contributes greatly to the national economy.
The sector is nearing critical mass thanks to its capability to adopt new technologies and increased efficiency in human resource management.
Currently, 23,000 cars can be purchased in the Bangladesh market every year, which about 3,000 are new, that your draft policy said was an indicator of the marketplace being at a short stage.
The demand will cross 100,000 once locally produced cars are created available as prices should come right down to reasonable levels. Bangladesh's automobile industry might even become a section of the global supply chain later on, it said.
The growing demand for cars, motorcycles and such is because the rise in purchasing power among everyone, it added.
In addition to the state's own make of cars, the government provides manufacturing facilities for the private sector and attract foreign direct investment (FDI) in the auto sector to lessen import dependence, said the draft policy.
As the marketplace develops, policy incentives could possibly be wanted to foreign automakers to look at semi-knocked down (SKD) production, the capability of which may go on to alter widely from 2,000 to 12,000 units per year.
However, if the gross annual sales are expected to be significantly less than 5,000, foreign automakers might prefer to just provide original equipment for local companies to use rather than make direct investments.
To make sure safety, product efficiency and environmental sustainability, programmes will be placed in location to promote research, design and development for locally produced automotive products alongside suitable fiscal and financial incentives, the policy said.
In May this past year, Mitsubishi proposed investing in Bangladesh to create vehicles of its own brand.
Ryujiro Kobashi, vice-president of Mitsubishi Motors, expressed interest in setting up an assembly plant at Bangabandhu Sheikh Mujib Shilpa Nagar in Chattogram during his ending up in Commerce Minister Tipu Munshi at his Dhaka secretariat office.
The company sought policy support from the federal government to create the plant, saying it could slowly but surely be upgraded to a complete automobile manufacturing facility.
Yesterday, Naoki conveyed to Humayun the interest of Japanese automakers, including Mitsubishi, and emphasised on bilateral dialogue to improve investment in Bangladesh.
He assured providing technological support for Bangladesh to create its brand of automobiles.
Naoki also urged the federal government to create motorcycle registration charges reasonable for the industry to flourish in Bangladesh.
Japan will help set up a testing and research institute to supply certifications for motorcycles, he said.
Motorcycle makers have already been demanding an 81 per cent cut in bike registration charges in the next fiscal year's budget as the purchasing power of the general mass has seen a sharp fall due to the pandemic.
The registration cost of a motorcycle, including registration fees, road tax, supplementary duties and other charges, is approximately Tk 22,000 on the average, which is approximately 25 % of the price tag on a 100cc motorcycle, the best-selling engine capacity.
The industry wants the charge to be fixed at Tk 4,000.
About the Japanese economical zone in Araihazar, Narayanganj, Naoki said it would be the very best in Asia regarding quality.
