A drastic fall in the demand for bicycles abroad mainly due to an economic slowdown in key export destinations has put the local manufacturers in dire straits, insiders have said.
According to them, domestic exports have dropped significantly in the recent months following a period of sustained shipments of this environment-friendly pedalled vehicle.
Official figures showed the domestic foreign currency earnings plummeted by almost 45 per cent in the first three months of the current fiscal year (FY), 2023-24.
According to data available with the Export Promotion Bureau (EPB), local bicycle exporters received $20.53 million in the first quarter (July-September).
The figure was $37.08 million in the corresponding period of FY 2023, disclosed the EPB.
Following a steady rise in the three consecutive FYs, the data revealed, the sector's export earnings declined by 15 per cent to $142.24 million in FY 2023.
Contacted, Bangladesh Bicycle & Parts Manufacturers and Exporters Association secretary general Md Luthful Bari said mainly economic sloth in Europe following war and other issues were responsible for the situation.
Before the recent downturn in business, the sector was doing fairly well, he told the FE.
"It means buyers were inclined to purchase or replace bicycles even during the pandemic," he said, adding that economic slowdown, especially in Europe, were forcing them to reduce the cost of living.
"As a result, bicycle brands there have also drastically reduced issuing new orders to manufacturing countries, including Bangladesh," argued Mr Bari.
Operating costs, including warehouse expense, are also much higher in Europe. The buyers are, therefore, going slow taking it into consideration.
In addition to the ongoing crisis like lower demand, local makers have been facing long-standing problems like erratic gas and electricity supply, he added.
Mr Bari further said that bicycle exporters could not avail cash incentive due to some complications despite an avowed declaration to provide them with a 4.0-per cent cash incentive.
Even parts exporters were expected to get a 15-per cent cash incentive, which has also remained suspended due to an ambiguity in relevant documents, he added.
Only a handful of companies, including Meghna Group, PRAN-RFL and Alita Bangladesh, export this two-wheeler.
Bangladesh exports bicycles to countries like the UK, Ireland, Belgium, Germany, Denmark, Sweden, the Netherlands, Italy, Finland, Spain and India.
Despite being a growing exporter, Bangladesh's home market meets 60 per cent of its demand with imported bicycles.
According to industry insiders, there is an estimated demand for 2.0 million pieces of bicycles per year.
Currently, the local bicycle market is estimated at around Tk 18 billion annually, with a growth rate of 7.0-8.0 per cent.
In addition to export, Meghna Group sells 'Veloce' and PRAN-RFL sells 'Duranta' brands in the local market.
Kamruzzaman Kamal, a director at PRAN-RFL Group, said in addition to the economic slowdown, hot summer weather could be a factor for European buyers.
"People at home and abroad are lowering their expenses for non-essential items to cope with the higher living cost," he said.
There is huge potential to grab the local market as the country is still import-dependent, according to Mr Kamal.
PRAN-RFL produces bicycles at its two factories in Habiganj and Rangpur.
saif.febd@gmail.com