Bangladesh set to be new hub for Indian auto companies
Tata Motors, Ashok Leyland, Mahindra and Bajaj Auto have stepped up their game through joint ventures and begun identifying homegrown distributor groups to assemble a major portion of their products in Bangladesh. These companies are firming up launches and ramping up capacity as they offer a very high level of customization to customers, reinforcing the product portfolio across all segments in the region, experts said.
Lijee Philip |
ETAutoApril 27, 2022, 11:30 IST
HIGHLIGHTS
- Indian auto OEMs bullish on Bangladesh
- Tata Motors, Ashok Leyland, Mahindra and Bajaj Auto step up game , through joint ventures , expanding capacity and launching new products
- Emission standards in Bangladesh also lag behind those in India and other developed nations
- Auto OEMs find it easier to service customers in Bangladesh, as its an India like market
As Sri Lanka is engulfed with its economic crisis, the new destination for
Indian auto companies seems to be Bangladesh that is on the brink of a major economic boom, spurring auto majors to look eastwards.
“We actively support our distribution partners through local manufacturing, financing and go- to- market operations”, added Sharma.
Tata Motors is the largest commercial vehicle brand, including small & heavy CVs and buses in Bangladesh with a two-third share. “It continues to invest in Bangladesh in developing a suitable product portfolio to serve our customers, building a wide network of sales & services, and expanding our CKD assembly facility in Jessore”, said a TAMO spokesperson.
Indian auto OEMs have focused on building their presence in the South Asian, African and Middle Eastern markets over the last few decades. In the economic downturn caused by Covid, the Bangladesh market continued to sparkle while most others suffered, said Kaushik Narayan, CEO of Leaptrucks, a platform for the sale of trucks and buses.
Emission standards in Bangladesh also lag India’s and other developed nations. With a wide range of value for money products available in their portfolio across multiple emission standards, matching terrain and weather conditions, Indian OEMs are uniquely positioned to cater to the requirements of the Bangladesh market, Narayan said.
Indian auto OEMs are capitalising on this growth story in Bangladesh by making substantial investments in JV and assembly operations. It's an India like market, so auto OEMs find it easier to service such customers, said Kavan Mukhtar, head, auto practice, at PwC.
Mahindra Automotive, which works with the local partner Rangs Group, has established itself in the pick-up segment. In tractors, Mahindra is exploring possibilities of local assembly of some specific products which will help the Bangladesh government in their program of ‘Make in Bangladesh.’
“We are also exploring possibilities in the aggrotech space to help farmers achieve higher yields and prosperity. Mahindra has partnered with the Karnaphuli Group and Rancon Group for distribution of products”, said a Mahindra spokesperson.
Chennai-based truck major Ashok Leyland, through its channel partner IFAD Auto, sells 65% of its locally assembled Light and Medium commercial trucks and buses in Bangladesh. “The plant includes a bus body assembly facility and cab weld line, a first of its kind in Bangladesh. We shall continue to promote locally assembled products which strengthen the local economy, develop suppliers base and provide local job opportunities,” said the Ashok Leyland spokesperson.
Ashok Leyland is currently the market leader in bus and 16T (Medium and Heavy commercial vehicle MHCV) segment. "Our LCV platform, Dost, is well accepted in Bangladesh and we are looking forward to the launch of Phoenix, our new 3.5T LCV in FY23. Our 10-14T ICV platform is also gaining market share and we look to enhance its sales through added features”, he added.
Indian passenger vehicles, two and three wheelers, light trucks, buses saw an average sales growth of 15-20% in Bangladesh in the last 2-3 years despite the dominance of Japanese reconditioned vehicles.
https://auto.economictimes.indiatimes.com/amp/news/industry/bangladesh-set-to-be-new-hub-for-indian-auto-companies/91117860