Global Business: Bangladesh Automobile Industry Overview

This report provides an overview of the Bangladesh automobile industry, examining the key players, sales trends, and government regulations. It highlights major companies like Uttara Motors Ltd and TATA Motors Bangladesh, and analyzes global and domestic sales figures, particularly focusing on the growth led by China. The report also details government regulations, including those related to vehicle construction, imports (especially used cars from Japan), and the duties imposed on parts and vehicles. It notes that Bangladesh is an increasing market for motor vehicles and emphasizes that the country imports a large portion of its vehicles from Japan, with used car imports being allowed under certain conditions. The report also mentions the supplementary duties on motorcycle parts and human haulers, providing a comprehensive look at the industry's structure and regulatory environment.

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Global business in the Asian century
5/18/2019

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BANGLADESH AUTOMOBILE INDUSTRY
Automobile Companies & Brands in Bangladesh:
A number of large car plants has been established which assembles Mitsubishi Pajero Sport,
Tata bus & motorcycles, Hino bus, and so on (Wikipedia, 2017). Uttara Motors Ltd, Nitol
Motors Ltd., S.R Motors Ltd., Akij Motors, Pragoti, Bangladesh Machine Tools Factory, Aftab
Automobiles, TVS Auto Bangladesh Limited, HS Enterprise, TATA Motors Bangladesh (Joint
Venture with Nitol-Niloy Motors Ltd), are some of the prominent assembling and
manufacturing companies. Some other companies include Atlas Bangladesh Ltd., Walton Hi-
Tech groups, Runner Automobiles, Bangladesh Honda Private Limited, Singer Bangladesh
Rangs Motor's Ltd., Chisti Engineering & Mechanical Works Rahimafrooz Globatt group,
Jonata Auto Mobile Parts, Ifad Autos Ltd.
Global & Domestic Sales Status:
A growth in the sales rate of cars has been found in the year 2016 , globally, i.e. across
nations, led by China. The country is considered as the largest growing economy around
the globe, as there has been a rise in the sales by 13%, with additional vehicles around 3.2
million. The sale rate has been observed amongst other successful nations or economies
such as European Union and US market. They have achieved the sales around 1.1 million or
7 per cent, and 70,000 or 0.4 percent sales, respectively (Scutt, 2017). The rise in the overall
sale of vehicles has been found from 90 million to 94 million within the period of 2015-16
(OICA, 2017).
Using the data from the Mobility Database, as per the world cars brand ranking 2017, it has
been found that Toyota is determined as the market leader. The company has achieved 1.35
million unit sales (+8.7 per cent) along with 9.5 % global market share within first two
months of the year 2017. It is further followed by Volkswagen with 1.036 million sales (+2.1
per cent) and Ford 896,000 sales (-2.9 per cent) (Focus2Move, 2017).
Regardless, it has been found that Bangladesh is facing increase in the demand for the
motor vehicles. As per the given list in the website of Bangladesh Road Transport Authority
(BRTA), 0.32 million vehicles has been registered, approximately within the region during
the period of 2015. Later on, an increase in registered vehicles has been found in total, i.e.
0.42 million vehicles in the year 2016. Moreover, in the last couple of years, the number of
vehicles has been increased as per the data, as the latest update stated that 69,198
registered vehicles have been listed in the year 2017.
Government Regulation:

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The manufacturers in Bangladesh must comply with section 84 (Power to make rules) of The
Motor Vehicles Ordinance, 1983, established by Government of Bangladesh. Under this,
section (Ministry of Law, Justice, and Parliamentary Affairs, 2017):
• The Government has established rules that regulate construction, equipment, and
maintenance of vehicles, & trailers. It includes establishment, registration, operation, &
supervision of motor vehicles repairing workshop.
• No prejudice to the general power, rules are established under this section. It
governs matters either, in reference of motor vehicle or trailers in certain circumstances,
namely:-
a. The height, width, length, & overhang of vehicles and loads carried;
b. The public service vehicles, seating arrangement & the protection of passengers against
the weather;
c. nature, size, and condition of the tyres;
d. steering gear & brakes;
e. the use of safety glass;
f. lamps, signalling appliances, & reflectors;
g. speed governors;
h. the discharge of visible vapour, sparks, ashes, smoke, grit or oil;
i. reducing noise released by vehicles;
j. forbidding audible signals in specific times or certain places;
k. Prohibiting appliances leading to danger;
l. the vehicle testing by established authorities periodically;
m. the particulars, excepting registration marks, to be released from vehicles;
n. trailers used with motor vehicles;
o. registration, regulation, & supervision of establishment undertaking repair of motor
vehicles & conditions governing such establishment;
Approximately 80 per cent of the cars are imported from Japan in Bangladesh, and vehicles
move to the left side of the road and imported must be driven towards the right hand.
Importing used cars, jeeps, microbus, and minibus, along with the old vehicles and tractors
are allowed under regulation of Bangladesh government.
However, vehicles imported in Bangladesh must not be older than four years, and should be
certified by JAAI (Japan Auto Appraisal Institute). In Bangladesh, used car tax is levied on the
imported vehicles. Only diplomats get import of one-used vehicles duty free and ports for

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shipment of vehicles are in Chittagong & Dhaka within Bangladesh (Japan Used Car Portal,
2017).
The motorcycle assembling & manufacturing companies pays 20 per cent supplementary
duty on the parts imported. It facilitates the motorcycle assemblers to integrate backward
more easily. The Human Hauler importers have to pay 25 per cent custom duty and 30 per
cent supplementary duty (Ministry of Finance, 2017).