“Made in Bangladesh” cars: how far are we?
The personal ownership of a car in Bangladesh has always been an expensive prospect. High import taxes, combined with the lack of an indigenous auto industry in Bangladesh, mean prospective buyers have to pay to double over a car's original price, sometimes even more.
However, with the massive 1,106% increase in car ownership (from 303,215 units to 4,471,625 units) in the past 15 years, combined with rapid industrialisation, local production of cars has become very close to reality. Some companies have already begun locally assembling cars for foreign brands, while others are planning for future joint production. With this in mind, we have put together a summary of all these companies and their achievements to date.
For this article, we are excluding the development of commercial and motorcycle assembly in Bangladesh, as those topics are best covered with their own separate dedicated reports.
Pragati Industries Limited | Multiple brands
Pragati's history of local car assembly goes back before our country's independence, when —Back then it was known as Ghandhara Industries— in the 60's it entered into an agreement with General Motor's European division to put together the Vauxhall Viva sedan. In more recent times, the Japanese automotive giant Mitsubishi has entered a five-year agreement with Pragati around 2010 to locally assemble the second generation Pajero Sport SUV. Both companies maintain this agreement to this day, with assembly switching to the new third-generation QX model. In recent years, the State-run enterprise reportedly also began working closely with Mitsubishi to make their brand of motor vehicles. In a report published on The Daily Star last year, Industries Minister Nurul Majid Mahmud Humayun said that Japanese Ambassador Ito Naoki had told him "He [Ito Naoki] also said that Japan would provide technical assistance for the production of Bangladesh's own brand of motor vehicles. He further offered to assist Bangladesh in developing the vendor industry related to automobile and light engineering industries and setting up an Automobile Testing & Research Institute in Bangladesh."
Other than Mitsubishi, Pragati also assembled 36 Mahindra Scorpio SUVs in 2017. The enterprise also offers the Foton SUV and various other commercial vehicles.
Rangs Limited | Mitsubishi Motors
Although Pragati has been putting together cars with the three-diamond badge for a while, most of their output ended up in the government fleet. The cars that do end up on the consumer market, are sold by Rangs Limited, a concern of Rangs Group. The local industrial giant has been putting together the cars on their own as well, assembling the Mitsubishi Outlander SUV at their Kashimpur, Gazipur plant for well over three years, with more than 200 units being successfully completed. Currently, the plant can assemble 4 units per day with Shoeb Ahmed, divisional director of Rangs Limited, informed daily star in February that for 2021 they hope to assemble 200 SUVs in a single year.
PHP Motors | Proton Holdings Berhad
PHP Motors, a sister concern of the PHP Family based in Chattogram, has been putting together Malaysia's Proton car as early as 2017. Their facility at Sagarika in Chattogram is capable of the annual production of 1,200 units a year and currently employs about 265 workers to assemble 10-12 vehicles per shift. PHP started with the assembly of the Proton Preve, a decently equipped family sedan, but also began assembling the 2021 Proton Saga, according to PHP Automobile chairman Sufi Mohammed Mizanur Rahman.
Akhtar Parvez, managing director of the company, told The Daily Star last February that PHP currently locally produces 25 of the 800 parts required to build a car. He hopes they will be able to manufacture most of the important parts in their factory by next year.
Fair Technology Limited | Hyundai Motor Company
Fair Technology Limited's entry into the Bangladesh auto industry has been recent, but it has already made significant headway toward setting up local production. Being the new sole distributor of Hyundai cars in Bangladesh, the company signed a contract in January with Bangladesh Hi-Tech Park Authority (BHTPA) to establish an assembly plant at Kaliakair, Gazipur. Mohammed Mesbah Uddin, Chief Marketing Officer of the Fair group, told the Daily star last February that they plan to invest $125 million in the next three to five years to set up a plant capable of producing 5,000 vehicles a year. Fair Technology, which has also been manufacturing Samsung smartphones since 2019, hopes to begin production as soon as 2022 and claims the locally assembled cars are likely to be 25 per cent lower than prevailing market rates.
Uttara Motors Limited | Maruti Suzuki
Another dealership that has switched its focus on local car assembly is Uttara Motors Ltd. They are investing $33.63 million to build a local assembly and manufacturing plant for Maruti Suzuki cars in Bangladesh. The company signed a lease for a 50-acre plot at Bangabandhu Sheikh Mujib Shilpa Nagar in Chattogram, last march.
Matiur Rahman, Uttara Motors Chairman and Managing Director, said the high-quality plant will generate employment for 800 people.
Although the companies mentioned above are already producing or soon to start production, many other local automotive ventures had their venture abruptly halted because of the ongoing pandemic.
Bangladesh Auto Industries Ltd. (BAIL), was planning to establish an electric vehicle factory on Bangabandhu Industrial Park. With an initial investment of $200 million that would total to $1 billion within the next five years, the company planned to manufacture from two-wheelers to sedans, SUVs, pick-ups, mini-trucks, and multipurpose vehicles. Unfortunately, the pandemic slowed down BAIL's plans considerably, with all plans being moved back a year. In an interview with The Daily Star Mir Masud Kabir, managing director of BAIL, said "We missed the target as the suppliers could not ship the required equipment on time even though we opened letters of credit earlier on," said Mir Masud Kabir, managing director of BAIL. "We were on track before the Covid-19 crisis hit but the prevailing situation has not been favourable for us. Regardless, we are maintaining correspondence with our foreign partners via digital platforms to keep the project alive," he added.
Nitol Motor's Suvare electric cars project also suffered similar delays because of the Coivd-19. The company has finished the construction of the assembly plant building on 10 acres of land in Pabna, but are unable to import the machinery required to build the car themselves.
"As per new target, we will bring the EV within next two and a half years," informed Abdul Matlub Ahmad, chairman of Nitol-Niloy Group.
Asked about the car, he said the locally designed 25-Kwh battery-electric car would have the size and feel of regular sedans and will cost about Tk 10 lakh to Tk 12 lakh.
In more recent times Bangla cars, a sister concern of the Hossain group, entered talks with Chinese carmaker Dongfeng Motors to start local vehicle production under their own marque. Because of covid complication, however, the plans have been put on hold and the company is assembling DFSK car in their assembly plant at Narayanganj as an interim solution.
Md Abdus Sattar, Chief Technical Officer (CTO) of Bangla cars, informed The Daily Star that the plant is now fully operational, having successfully assembled 6 new DFSK "Glory" crossovers. The company plans to officially inaugurate the assembly plant after Eid, or whenever the lockdown eases.