Management 2: Analysis of Automobile Industry in Bangladesh

This report provides a comprehensive SWOT analysis of the automobile industry in Bangladesh. It begins by highlighting the industry's evolving nature, its symbolic association with economic development, and the shift of growth from developed markets to Asia. The report then examines the strengths of the industry, including increasing demand and manufacturing benefits. However, it also addresses weaknesses, such as efficient labor crises, high investment barriers, and environmental concerns. The opportunities identified include strategic alliances, foreign investments, and increasing demand. The report also acknowledges the threats, such as intense competition, fluctuating fuel prices, economic uncertainty, and government regulations. The conclusion emphasizes the government's efforts to boost the local automobile manufacturing sector and outlines policy guidelines and roadmap for the industry's growth, focusing on assembling and manufacturing units with private investment and foreign collaborations. This report is a valuable resource for understanding the current state and future prospects of the automobile industry in Bangladesh.

Management 1
Global business in the Asian century
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Management 2
Analysis of Automobile Industry, Bangladesh
SWOT analysis
1. Evolving Industry: Automobile is symbolic of economic development and autonomy in
any given country. It allows citizens to work, travel and live in ways that were
unimaginable years ago. It is obvious that each automobile journey will either end with
an economic matter or with various other benefits impacting the quality of life.
2. Transferring developments in Asia markets: even if the automobile is the rhythm in
the developed markets such as Europe and America, the same trend is shifting to the
developing markets like Bangladesh, India, China, and other Asian countries. This is as a
result of an increase in shifting the way of living, disposable earnings, and a stable
economy.
3. Increasing demand for automobile luxurious goods: automobile companies such as
Mercedes-Benz, Hyundai, Scania, VOLVO and BMW are aiming high to the developing
nations as the demand of luxury in public transporting sector continues to rise.
4. Manufacturing benefits to minimize expenses: automobile organizations are
manufacturing their plants in developing countries such as China, India, and Bangladesh
because they have an economical workforce which results in lower production cost.
Weaknesses
1. Efficient labor crisis: this is a major drawback for the automobile companies in
Bangladesh.

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2. High investment and switching barriers: The initial investment and switching cost in
the automobile industry is very high hence one cannot invest or start on other businesses.
As a result, this has become a major challenge for the automobile industry in Bangladesh.
3. Environmental concern: motor vehicle emissions contribute significantly to air
pollution especially in Dhaka city. This is a weakness to the industry because of the
unavailability of an electric car charging station. Bangladesh may take much time to
import electric car due to lack of environmental awareness.
4. Policy support: government initiative and policies may affect the growth of the
automobile industry in Bangladesh. Some of these regulations include higher taxes,
excise duty, and unpredictability in fuel prices.
Opportunities
1. Strategic alliance: having strategic alliances with other companies is very vital for the
automobile industry. By partnering with other firms and using specified capabilities, they
can differentiate their services and products.
2. Foreign investments: Bangladesh has been nominated as country of safe investment by
many investors. Despite that no vehicle industry has been established, this is a great
opportunity for the business to increase its production.
3. Increasing demand: the increasing population in Bangladesh has led to increasing
demand for automobile products. Besides, an increase in the number of middle-class
people with more disposable earnings is an opportunity for the industry.
Threats

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1. Intense competitive market: competition has become a major threat to the automobile
industry as the number of competitors continues to rise. This is a great hindrance to the
development of the industry.
2. Fluctuation in fuel prices: from the customers’ perception, volatility in the cost of fuel
remains the determining issue to the development of the business.
3. Economic uncertainty: automobile industry in Bangladesh may be frightened for a long
period by economic issues such as macroeconomic uncertainty, idleness, and depression
among others.
4. Higher cost: cost of raw material, high fixed cost, high investment in projects and
research are essential factors for the development of the business.
5. Government regulation: laws and policies imposed by the Bangladesh government are
not so promising for the automobile business. Besides, the ever-rising tax rate is a threat
to the growth of the automobile industry.
6. Political unrest: political instability is a major threat to the development of every
industry in Bangladesh.
Conclusion
Bangladesh is working hard towards achieving its long term development goal through taking
and implementing important procedures for it. The government is supporting this by taking
necessary procedure in the way of policymaking. Ministry of Industries (MoI) is aiming to boost
up local automobile manufacturing sector and increase national GDP through the completion of
the automobile roadmap and policy guideline 2012-2021. In the government's policy guideline
emphasis has been given on efforts of developing trading companies gradually as well as focused
on assembling and manufacturing units, like Semi-Knocked-Down (SKD), Complete Knocked

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Down (CKD) and locally Complete Built Unit (CBU). A strong preference has been given to the
favored development of the government's current assembling units along with more private
investment in motorcycle manufacturing and heavy vehicle assembling. The roadmap has also
targeted further private investment in collaboration with foreign companies (The Financial
Express Bangladesh, 2013).