Pandemic puts a damper on Tata pickup project
The initiative of Tata Motors and Nitol-Niloy Group to assemble the Indian automobile giant's specialised pickups in Bangladesh has hit a roadblock as the progress of the project has been stymied by the ongoing pandemic.
"We'd set a target to get started on assembling pickups and manufacture at least 25 % of the parts in Bangladesh by 2020. However the pandemic has delayed our work by at least a year," said Abdul Matlub Ahmad, chairman of Nitol-Niloy Group.
"We could not perform just work at the factory as Tata's engineers and other technical officials cannot travel amid the pandemic," he added.
Based on the chairman, the group initially planned to assemble 800 pickup trucks monthly at a factory of Nita Company, a joint venture of Nitol-Niloy and Tata, in Kishoreganj.
Now though, they have a vintage plant in Jashore, where they can assemble small pickups and other trucks.
Currently, the chassis for trucks, buses and minibuses are imported in completely knocked down (CKD) condition and come up with at the Jashore plant, said Ahmad.
The demand for pickup trucks in Bangladesh was over 1,000 units monthly going back four years with a rise rate of 18 %, data from the Bangladesh Road Transport Authority (BRTA) shows.
The BRTA approved the registration to 13,512 pickups from various manufacturers in 2017, up from 11,371 in 2016, 10,257 in 2015 and 9,554 in 2014.
However, the BRTA has been struggling to update these statistics amid the ongoing Covid-19 pandemic.
"Just about everyone has the machineries required at the Kishoreganj plant to start out assembling as planned but unfortunately, pandemic has caused delays," said Ahmad, also a former president of the Federation of Bangladesh Chambers of Commerce and Industry, the country's apex trade body.
The end game is not simply to assemble pickups in Bangladesh but to spur on automobile manufacturing in the united states, he added.
Ahmad also said that they actually wished to introduce a 'made-in-Bangladesh' pickup by January 2021. However, the initiative has been delayed by at least one year.
"I dreamed to introduce manufactured in Bangladesh automobiles for the country's golden jubilee however the situation is not inside our favour," he said.
As per international practice, at least 25 % of a vehicle's elements must be made domestically to call it an area product.
Nitol Motors would manufacture the chassis, body, pinion, rims and brake components, which will be economically viable, Ahmad said, adding that Tata would directly supply the rest of the pieces to the manufacturing facility.
Nitol Motors started assembling Tata buses and trucks in 1991 and has been Tata Motors' partner since 1988.
Now, it's the greatest distributor of Tata Motors in South Asia and the most dominant player in the country's commercial vehicle market with over 40 % of the marketplace share.
According to Nitol Motors, it makes up about over two-thirds of the pickup market in the united states and has been growing at a double digit rate for days gone by five years.
Because of delays, Ahmad said their investment would increase to Tk 500 crore from around Tk 300 crore to create an assembly plant for pickup trucks and it would need a total Tk 800 crore to manufacture trucks and buses in future.
Ahmad also said that the assembly of pickups would reduce its price in the domestic market by about 1 / 3 per unit.
RAB, Police and small entrepreneurs will be major customers for the pickup, he added.
"If we can to get started on assembling and manufacturing at the plant, local vendors who provide us components would be beneficial, as Prime Minister Sheikh Hasina announced 'Light Engineering' as the merchandise of the year to provide special attention for earning more forex through exporting various products."
