Bangladesh Motorcycles Industry found new fuel in the higher limits for imported vehicles, now at 500cc. The domestic market is at the highest level ever and in 2022 sales have been substantially flat from the previous year at 587.000 units.
Motorcycles Market Trend in 2022
The two wheelers represent the main individual mobility device in the country and has huge space for growing up in the next decade, in line with a growing per-capita income.
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$1.829 in the 2019), 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.
A decade ago the objective was to support the start-up of local production, creating barrier to imported vehicles and components, but in the most 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.
Bangladesh, as one of the rare countries in the world with motorcycle engine capacity restrictions, at the end of 2021 decided to follow the Tariff Commission’s recommendation and applications from several new investors, moved up the limits for road motorcycles from 250cc to 500cc opening the market to new opportunities.
The first new entrance was the Indian Royal Enfield, leader in this segment in the entire region. IFAD Motors Ltd. has immediately signed a memorandum of understanding with Royal Enfield to import (and probably locally produce) their product in the country.
The domestic market is at the highest level ever and in 2022 sales have been substantially flat from the previous year at 587.000 units.
The market leader Bajaj Auto is progressively losing terrain under the competition of Hero Motor, TVS Motor and Chinese manufacturers, while the domestic producer, Runner positively ended the IPO process finding fresch capital to further boost the business.
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 with a current capacity of 200.000 annual production.
Actually over 80% of two-wheelers sold in Bangladesh are locally manufactured.
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.
