Intro

Over the years as other heavy industries are developing bit by bit, there is clear indication that automobile industry is also going to be established soon. The yearly demand of transportation is increasing as the communication systems are developing and population in urban areas are increasing. With a steady growth rate of GDP, the purchasing power of individuals are is going up every year. Thus the purchasing power of individuals has risen along with the demand for cars, motorbikes and commercial vehicles.  The wide variety of brands of vehicles, whether commercial-heavy or light motor vehicles, are imported by Bangladesh and the countries of origin mainly include countries like Japan, India, South Korea, China, Germany, France, Malaysia, UK and USA (International Trade Centre, 2002). But since government imposed a huge amount of tax over the import of vehicles, affording a vehicle has become difficult for middle income earners which are the majority portion of the country. Thus the necessary of setting up this industry is necessity now.

Current Scenario of Bangladesh
National highway 3,544.06 km
Regional highway 4,278.07 km
Zilla road 13,247.79 km
Source: List of roads in Bangladesh (Wikipedia)

INDUSTRY OVERVIEW

Because of lack of domestic source of raw materials and backward linkage, vehicle manufacturing and assembling industries did not develop in Bangladesh. Automotive industry in Bangladesh is largely dominated by import of reconditioned and new vehicles mostly from like Japan, China, India and few from Europe and USA. Recently, few entrepreneurs emerged with the collaboration foreign companies like Hino, Mitsubishi, Tata Motors, Ashok Leyland etc. to start assembling cars, trucks, pickups and buses. Sales of truck in the country increased significantly because of the boom in garments and cement sector as well as easy financing.

Most of the trucks are consumed by these two sectors in the form of covered van. Besides, CNG driven buses are also increasing. However, government tariff and tax structure also play important role to motivate the supply of vehicles in Bangladesh. There are 14-16 large automobile marketers in Bangladesh, among which 5-6 have own assembling facilities. Others are sole distributors or importers. IFAD Autos Limited, Aftab Auto, Navana, Rangs, Rancon Motors, Nitol Motors, Runner Motors, AG automobiles are the major distributors in Bangladesh.

Automobile Industry Heads Current Scenario
Local Demand $2.5Bn
Raw Material Source(Local: Import) 5:95
Future Investment possibility $2.5-3Bn
Future employment option 1.5m
Import Situation 2.01Bn

Automobile Companies & Brands in Bangladesh:

Products Brand Name
Heavy Bus Hino, Mitsubishi, Isuzu, Volvo, Tata, Ashok Leyland etc.
Mini bus Hino, Mitsubishi, Isuzu, Toyota, Sawraz Mazda, Tata, Eicher etc.
Microbus Nissan, Mitsubishi, Toyota etc.
Heavy truck Hino, Tata, Bed Ford, Isuzu, Ashok Leyland
Mini Truck Hino, Tata, Mitsubishi, Isuzu, Toyota, Eicher, Sawraz, Mazda etc.
Motor Car Toyota, Mercedes Benz, Nissan, Mitsubishi, Ford, Suzuki, Dewoo, Proton ,Saga, Proton Vira, Hyundai, BMW, Maruti etc
Four wheels Toyota, Tata, Mitsubishi, Nissan etc.
Auto tempo Bajaj, Krishan
Scooter Bajaj, Krishan
Motor-cycle Honda, Xingfu, Jialing, Jangshen, Yamaha, Suzuki, Hero, TVS Victor, Bajaj , Vespa etc.
Light & heavy commercial vehicles Nissan, Dewoo, Hyundai, Volvo, Ashok Leyland, Tata, Hino, Mitsubishi etc.
Farm and agricultural vehicles Hyundai, Dewoo, Dongfang, Dongchang etc.
The number of vehicle registered from 2011 till 2017 (February):
Type of Vehicles 2011 2012 2013 2014 2015 2016 2017/Feb Grand Total
Ambulance 219 181 243 338 480 378 66 1905
Auto Rickshaw 20,423 23,545 15,697 19,897 20,000 11,173 1,182 111,917
Auto Tempo 175 626 395 500 1,095 1,322 119 4,232
Bus 1,761 1,439 1,107 1,488 2,391 3,833 818 12,837
Cargo Van 489 282 687 608 399 1,017 158 3,640
Covered Van 2,354 1,421 2,271 2,869 2,354 3,340 690 15,299
Delivery Van 1,004 774 894 1,176 1,719 2,181 366 8,114
Human Hauler 1,152 715 385 225 1,142 3,487 810 7,916
Jeep(Hard/Soft) 2,134 1,569 1,314 1,870 3,601 4,892 729 16,109
Microbus 4,051 3,044 2,537 4,313 5,224 5,804 939 25,912
Minibus 276 249 148 256 323 472 89 1,813
Motor Cycle 114,616 101,588 85,808 90,685 240,358 332,057 53,675 1,018,787
Pick Up 10,460 7,625 6,553 9,554 10,257 11,371 1,906 57,726
Private Car 12,950 9,224 10,472 14,699 21,062 20,304 3,942 92,653
Special Purpose Vehicle 396 226 227 172 296 620 215 2,152
Tanker 317 195 226 362 324 394 68 1,886
Taxicab 75 172 51 374 88 44 2 806
Tractor 5,200 3,494 1,885 1,522 1,699 2,576 449 16,825
Truck 7,327 4,335 5,129 8,136 6,330 7,275 1,920 40,452
Others 7 1 1,080 1,595 2,073 3,870 1,055 9,681
Total 185,386 160,705 137,109 160,639 321,215 416,410 69,198 1,450,662
Source: Bangladesh Road Transport Authority (BRTA)

Prospect of the Industry

Geo-politically, Bangladesh’s location is very important and subtle in terms of Pan-Asian continental surface connectivity. It has the prospect to be a focal connecting point between SAARC and BIMSTEC countries. The issues like intra and inter-country connectivity, export and growth centers facilitating infrastructure, Asian Highway, Trans Asian Railway Network and so forth are the important emerging issues of the country’s surface transport strategy. Thus Government of Bangladesh has formulated Road master plan for the period of 2005-2025-

  1. National Highways need to be upgraded into 4/6 lanes with medians to commensurate with higher traffic growth and to improve road safety.
  2. Construction of new bridges to ensure uninterrupted traffic flow including replacement and major repair of existing old narrow bridges for ensuring safety.
  3. Road safety needs to be properly addressed in road design and enforced during traffic management.
  4. Maintenance needs a higher priority, more resources, improved management reform and better quality standard.
  5. Institutional reform and digitalization of Roads and Highways Department (RHD)’s activities.

The growth of automobile industry is linked to the country’s industrial activities and the overall GDP. Thus realizing its necessity and potentiality, government of Bangladesh has added automobile industry as one of the thrust sector of Bangladesh.