Bicycle export from the country experienced a sudden slump in the 2023 fiscal year. Exports in the preceding years since FY2019 saw a steady growth, notably a 58 per cent growth in FY 2021. Given the small manufacturing base, export earning does not at all look great, hovering around $140-plus million in the last fiscal. Sector insiders are, however, hopeful about enhanced market access in the near future.
Decades ago, it was rather unlikely to hope that Bangladesh would make its presence felt in the international bicycle market alongside meeting soaring local demand. Although manufacturing the two wheelers began in the country sometime ago, the purpose was ostensibly to cater to domestic market – that too only partly. Within years, the production line expanded with more entrepreneurs including a foreign venture joining the industry, and export began to emerge as a key objective. Against this backdrop, the growth of export is no mean accomplishment.
The European Union's statistical wing, Eurostat, furnished a comprehensive picture of the expansion of Bangladesh's bicycle sector in the European markets. It says, Bangladesh has made a major breakthrough in exports to the European markets since 2010. It was in that year that Bangladesh's export of bicycles to Europe, measured in terms of ranking, rose to fifth position from tenth in the preceding year. The ranking has substantially improved in the following years as, according to Eurostat, in 2017, Bangladesh became the third-largest exporter of bicycles to the UK and the EU.
Access of bicycles from Bangladesh to the developed markets is attributed to people's preference for the environmentally friendly, social distance-friendly two wheelers – a safer mode of commuting instead of using public transport. Clearly, covid-19 has had a positive impact on overseas marketing. At present, eight companies in the country export bicycles, two of which are in the Chittagong Export Processing Zone (CEPZ). Besides, there are bicycle manufacturing companies in Dhaka, Gazipur, and Sylhet. Malaysian company Alita (BD) pioneered bicycle exports from Chittagong back in 1995 with the export of 37,000 units to the UK. Soon other manufacturers followed suit. About 30 to 40 per cent of the raw materials for making these bicycles come from China, India, Malaysia, Indonesia, and Vietnam.
With expansion in manufacturing, it is encouraging for the industry to see a boom in local market. Bicycle riders have been increasing in the country, to the extent that the surge in bicycle sales in local markets tends to suggest the growth trend as highly promising, coupled with the prospect of further expansion in manufacturing. The market is fast growing and the share of locally produced bicycle is increasing. According to information made available by the bicycle merchants' association, presently there are more than 200 retail bicycle outlets in the country.
Although the number of manufacturing plants in the country is only a few, the growing demand at home and trends in increased sales abroad have motivated the plant owners to plan their production targets at much higher levels than they had been doing in the past years. To meet the increasing demands, new entrepreneurs are also set to go for bicycle manufacturing in a big way to cater to both domestic and overseas markets.
It has been learnt from media reports that over the recent years, there has been an increase of 30-40 per cent in local sales, and annual consumption is estimated at half a million pieces. A major segment of the high and middle-end bicycles is import-dependent. A number of reputed manufacturing groups have been producing quality bicycles for local markets as well as for exports to some target markets in Europe.
Prospects of exporting are a great stimulus for the manufacturers who, it has been learnt, are quite upbeat about a considerably increased share in global bicycle exports. Concerned quarters are of the opinion that due to discrepancies in the duty structure of spares and imported bicycles, the sector is not getting the right boost it deserves in the wake of the increased demand both at home and abroad.
With good prospect of exporting coupled with growing domestic consumption, further expansion of the bicycle industry needs to be planned in a sustainable way. Facilitating the sector by way of support in production and marketing, harmonsing the duty structure, and necessary fiscal incentives need to be firmed up in consultation with the stakeholders. It has been learnt that the manufacturers have already asked for some facilitations from the government in terms of fiscal and financial incentives. In a move some time ago, the government decided to provide 4.0 per cent cash incentive for bicycle export which, no doubt, is inspiring.
However, now that the sector is well set for meeting both domestic and overseas demands, the onus is on the government to come up with fiscal support and complementary measures for the nascent industry's desired growth.
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