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https://motorcyclesdata.com/2020/02/09/bangladesh-motorcycles/
Bangladesh. In the 2019 two-wheeler sales over 600,000. Bajaj dominates
Bangladesh Motorcycles Industry is the new frontier for the entire sector. Supported by a favorable development policy and high investment by Indian and Japanese manufacturers, the industry is booming. Following sales doubled in the last three years, in the 2019 sales hit the 0.6 million units. Bajaj Auto dominates.
Bangladesh starring economic growth
With a population of 167 million people and an annual GDP growth averaging over 7% in the last five years, and high remittance from expatriates, Bangladesh represents one of the World’s Top 5 emerging economy for the next decade. Despite doubled in the last five years, the pro capita income is still among the lowest in the World (US$1.521 in the 2017), but it is projected to double within the next five years.
The economic boom created a huge demand for individual mobility and the two-wheeler industry represents the most efficient solution, following the pathway already tracked by several others South Asian countries.
Fortunately, local governments have embraced this philosophy and have put in place a range of tax initiatives, import policies, incentives to innovation. While the idea a decade ago was to support the start-up of local production, creating barrier to imported vehicles and components, in recent years a more opened view has taken space and the government has reduced duties on imported parts (from 25% to 20%) and on imported models.
The reduction of two-wheels registrations cost by 75% (from BDT 20.000 to 5.000) and the VAT reduction to the sector, both effective from January 2018, finally demonstrate as government has understood how is better to utilize the motorcycles industry as a volano for the entire economy rather than as a cash cow.
Introduction of ride-sharing services in Dhaka and Chattogram in recent years has also contributed to a rise in demand for motorbikes.
Motorcycles Manufacturing
The Indian Bajaj Auto is producing locally since the 2015 and was immediately followed by TVS, Hero Motors, Suzuki and Yamaha.
The last to open a plan was Honda. Indeed, Honda opened its motorcycle plant in November 2018. The plant will have an initial annual production capacity of 100,000 units a year. By 2021, the production capacity will expand to 200,000 units a year, according to BHL, which has been marketing Honda brand bikes in Bangladesh for the last several decades. They produce seven models: Dream Neo 110, LIVO 110, CB Shine 125, CB Trigger 150, CB Hornet 160R and CBR150R.
Actually over 80% of two-wheelers sold in Bangladesh are locally manufactured.
However, the value of two-wheeler exports from India to Bangladesh jumped 50 per cent in FY18 to $277 million (Rs 1,900 crore), making India’s the biggest export market, ahead of Sri Lanka. The value of shipments to Bangladesh has more than doubled since FY16, when it was just 8 million.
In Bangladesh, the import duty is 45% keeping the motorcycles prices about 2.5 times higher than those in India. However, local manufacturers can agree with the government a discount on this duty, if they produce at least one fifth of the bike in the country.
Market evolution and perspectives
A decade ago, Bangladesh two-wheeler sales were below 10.000 units per year. Then the industry evolved rapidly, thanks to the investments of new local brands – like Runner and Walton, Indians companies – Bajaj Auto, Hero Motor and TVS -, and Japanese – Suzuki, Yamaha and Honda.
In the 2012 the market was already up 10 times compared with 5 years before, while kept steady growing until the 2016, when sales were not far from the quarter of a million.
However, the new policy established by the government in the 2017 changed the industry perspective immediately booming the demand, thanks to the cut of motorcycles price in a range of 20% (both for imported and local made models) and a new life started.
In the following years the market boomed up doubling volume to hit the 487.000 units in the 2018 and finally at over 600.000 units in the 2019.
While Japanese brands are growing, the market is literally dominated by Indian brands, with Baja Auto leader with near 33% of share, followed by Hero Motor and TVS. Honda is fast growing and hold a market share over 11%.
There is a limit to the import of motorcycles with high engine displacement and this is the reason why top premium brands are not imported in the country.
Post Views: 1,673
Bangladesh. In the 2019 two-wheeler sales over 600,000. Bajaj dominates
Bangladesh Motorcycles Industry is the new frontier for the entire sector. Supported by a favorable development policy and high investment by Indian and Japanese manufacturers, the industry is booming. Following sales doubled in the last three years, in the 2019 sales hit the 0.6 million units. Bajaj Auto dominates.
Bangladesh starring economic growth
With a population of 167 million people and an annual GDP growth averaging over 7% in the last five years, and high remittance from expatriates, Bangladesh represents one of the World’s Top 5 emerging economy for the next decade. Despite doubled in the last five years, the pro capita income is still among the lowest in the World (US$1.521 in the 2017), but it is projected to double within the next five years.
The economic boom created a huge demand for individual mobility and the two-wheeler industry represents the most efficient solution, following the pathway already tracked by several others South Asian countries.
Fortunately, local governments have embraced this philosophy and have put in place a range of tax initiatives, import policies, incentives to innovation. While the idea a decade ago was to support the start-up of local production, creating barrier to imported vehicles and components, in recent years a more opened view has taken space and the government has reduced duties on imported parts (from 25% to 20%) and on imported models.
The reduction of two-wheels registrations cost by 75% (from BDT 20.000 to 5.000) and the VAT reduction to the sector, both effective from January 2018, finally demonstrate as government has understood how is better to utilize the motorcycles industry as a volano for the entire economy rather than as a cash cow.
Introduction of ride-sharing services in Dhaka and Chattogram in recent years has also contributed to a rise in demand for motorbikes.
Motorcycles Manufacturing
The Indian Bajaj Auto is producing locally since the 2015 and was immediately followed by TVS, Hero Motors, Suzuki and Yamaha.
The last to open a plan was Honda. Indeed, Honda opened its motorcycle plant in November 2018. The plant will have an initial annual production capacity of 100,000 units a year. By 2021, the production capacity will expand to 200,000 units a year, according to BHL, which has been marketing Honda brand bikes in Bangladesh for the last several decades. They produce seven models: Dream Neo 110, LIVO 110, CB Shine 125, CB Trigger 150, CB Hornet 160R and CBR150R.
Actually over 80% of two-wheelers sold in Bangladesh are locally manufactured.
However, the value of two-wheeler exports from India to Bangladesh jumped 50 per cent in FY18 to $277 million (Rs 1,900 crore), making India’s the biggest export market, ahead of Sri Lanka. The value of shipments to Bangladesh has more than doubled since FY16, when it was just 8 million.
In Bangladesh, the import duty is 45% keeping the motorcycles prices about 2.5 times higher than those in India. However, local manufacturers can agree with the government a discount on this duty, if they produce at least one fifth of the bike in the country.
Market evolution and perspectives
A decade ago, Bangladesh two-wheeler sales were below 10.000 units per year. Then the industry evolved rapidly, thanks to the investments of new local brands – like Runner and Walton, Indians companies – Bajaj Auto, Hero Motor and TVS -, and Japanese – Suzuki, Yamaha and Honda.
In the 2012 the market was already up 10 times compared with 5 years before, while kept steady growing until the 2016, when sales were not far from the quarter of a million.
However, the new policy established by the government in the 2017 changed the industry perspective immediately booming the demand, thanks to the cut of motorcycles price in a range of 20% (both for imported and local made models) and a new life started.
In the following years the market boomed up doubling volume to hit the 487.000 units in the 2018 and finally at over 600.000 units in the 2019.
While Japanese brands are growing, the market is literally dominated by Indian brands, with Baja Auto leader with near 33% of share, followed by Hero Motor and TVS. Honda is fast growing and hold a market share over 11%.
There is a limit to the import of motorcycles with high engine displacement and this is the reason why top premium brands are not imported in the country.
Post Views: 1,673
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