Need for prudent policy to develop motorbike industry stressed
Friday, 6 January 2012
FE Report
Both policymakers and entrepreneurs Thursday underscored the need for formulating a prudent policy for the development of the motorcycle manufacturing industry in Bangladesh.
They said Bangladesh has not been able to reach an expected stage in this sector which is mostly dominated by imported motorcycles over the last 40 years despite 25 per cent annual growth in motorcycle sales in the country combined with large export opportunities.
"You, both the manufacturers and the importers come up with a comprehensive proposal for the development of the motorcycle manufacturing industry in the country. We will convince the government to approve it within 15 days," said Mozibur Rahman, chairman of Bangladesh Tariff Commission.
He was speaking as the chief guest at the stakeholders' meeting on 'Developing Policy Guidelines for Motorcycle Manufacturing Industry in Bangladesh', organised by International Business Forum of Bangladesh (IBFB) at their office in the city.
ABM Khorshed Alam, additional secretary of industries ministry, and Shah Alam Khan, member (Customs), National Board of Revenue, were present as the special guests with IBFB president Mahmudul Islam Chowdhury in the chair.
Professor M Kamal Uddin, director of Institute of Appropriate Technology of Bangladesh University of Engineering and Technology (BUET), presented the keynote paper on the theme.
In 2010 about 0.24 million unit of motorcycle were sold showing a 29.42 per cent growth against 2009. The total number of units sold in 2011, according to industry insiders, stood at 0.35 million.
Present domestic demand is about 0.5 million. The country manufactures 0.3 million units. Walton Automobiles manufactures 0.2 million units and Runner Automobile 0.1 million units. A few other companies like Road Master Ltd, Honda with Engineering Corp and Bajaj are in the pipeline to be turned into manufacturers.
Mr Mozibur said there is lack of coordination among the local motorcycle manufacturers, assemblers and importers. Presently there are some misunderstanding and arguments about tariff, duty, tax facilities for importing and manufacturing various parts, accessories and raw materials of motorcycles, he said.
"The government is very positive to develop the automobile sector as it can be a driving force for the economy. I have received two proposals from the industry players, which are very confusing for the government to understand their actual need," he said.
He blamed the industry people for not having a policy in the sector as they could not be united even on the definition of Completely Knocked Down (CKD) and Completely Built-up Unit (CBU). He asked them to come up with a proposal for five-year policy guideline. The government is ready to give fiscal incentive and policy support once they identify their problems and advise the government what to do.
Shah Alam Khan said the government has already given various facilities to the manufacturers. "But the stakeholders of the motorcycle sector need to be united for proposing a policy guideline keeping in mind the interest of the consumers and the economy. NBR or other agencies will not be a problem once you submit a comprehensive policy," he said.
He said all the benefits are provided to the manufacturers and importers but the consumers are deprived of the benefits.
In his presentation Kamal Uddin said as the present demand for motorcycle is growing at 25 per cent annually there will be a demand of about 0.8 million motorcycles in 2016. Within 10 years the demand will reach about 2.0 million units, he said.
The country now has 20 CBU motorcycle suppliers and seven CKD industries.
Asia is the highest motorcycle manufacturing and consuming region in the world with China being the top manufacturer which accounts for 50 per cent of Asian production (17 million units per year). The other top Asian players are India with 5.0 million units, Indonesia 5.0 million units, Japan 1.5 million units and Vietnam 2.0 million units. Five South East Asian countries including Vietnam and Thailand account for 30 per cent of Asian production.
Lokman Hossain, international marketing officer of Walton, said the manufacturers face difficulty while exporting, especially to Africa and Sri Lanka where there is a potential market.
"Besides, India does not face any problem in exporting motorbikes to our country but we have to pay 140 to 155 per cent duty while it is 157 per cent for Thailand," he said.
He suggested that the supplementary duty on CKD should be 45 per cent like the CBU. He also demanded cut in duty of raw materials for producing motorcycles.
He expects to increase value addition in the motorcycle manufacturing industry upto 50 per cent by 2014, which is now 20 per cent.
Both policymakers and entrepreneurs Thursday underscored the need for formulating a prudent policy for the development of the motorcycle manufacturing industry in Bangladesh.
They said Bangladesh has not been able to reach an expected stage in this sector which is mostly dominated by imported motorcycles over the last 40 years despite 25 per cent annual growth in motorcycle sales in the country combined with large export opportunities.
"You, both the manufacturers and the importers come up with a comprehensive proposal for the development of the motorcycle manufacturing industry in the country. We will convince the government to approve it within 15 days," said Mozibur Rahman, chairman of Bangladesh Tariff Commission.
He was speaking as the chief guest at the stakeholders' meeting on 'Developing Policy Guidelines for Motorcycle Manufacturing Industry in Bangladesh', organised by International Business Forum of Bangladesh (IBFB) at their office in the city.
ABM Khorshed Alam, additional secretary of industries ministry, and Shah Alam Khan, member (Customs), National Board of Revenue, were present as the special guests with IBFB president Mahmudul Islam Chowdhury in the chair.
Professor M Kamal Uddin, director of Institute of Appropriate Technology of Bangladesh University of Engineering and Technology (BUET), presented the keynote paper on the theme.
In 2010 about 0.24 million unit of motorcycle were sold showing a 29.42 per cent growth against 2009. The total number of units sold in 2011, according to industry insiders, stood at 0.35 million.
Present domestic demand is about 0.5 million. The country manufactures 0.3 million units. Walton Automobiles manufactures 0.2 million units and Runner Automobile 0.1 million units. A few other companies like Road Master Ltd, Honda with Engineering Corp and Bajaj are in the pipeline to be turned into manufacturers.
Mr Mozibur said there is lack of coordination among the local motorcycle manufacturers, assemblers and importers. Presently there are some misunderstanding and arguments about tariff, duty, tax facilities for importing and manufacturing various parts, accessories and raw materials of motorcycles, he said.
"The government is very positive to develop the automobile sector as it can be a driving force for the economy. I have received two proposals from the industry players, which are very confusing for the government to understand their actual need," he said.
He blamed the industry people for not having a policy in the sector as they could not be united even on the definition of Completely Knocked Down (CKD) and Completely Built-up Unit (CBU). He asked them to come up with a proposal for five-year policy guideline. The government is ready to give fiscal incentive and policy support once they identify their problems and advise the government what to do.
Shah Alam Khan said the government has already given various facilities to the manufacturers. "But the stakeholders of the motorcycle sector need to be united for proposing a policy guideline keeping in mind the interest of the consumers and the economy. NBR or other agencies will not be a problem once you submit a comprehensive policy," he said.
He said all the benefits are provided to the manufacturers and importers but the consumers are deprived of the benefits.
In his presentation Kamal Uddin said as the present demand for motorcycle is growing at 25 per cent annually there will be a demand of about 0.8 million motorcycles in 2016. Within 10 years the demand will reach about 2.0 million units, he said.
The country now has 20 CBU motorcycle suppliers and seven CKD industries.
Asia is the highest motorcycle manufacturing and consuming region in the world with China being the top manufacturer which accounts for 50 per cent of Asian production (17 million units per year). The other top Asian players are India with 5.0 million units, Indonesia 5.0 million units, Japan 1.5 million units and Vietnam 2.0 million units. Five South East Asian countries including Vietnam and Thailand account for 30 per cent of Asian production.
Lokman Hossain, international marketing officer of Walton, said the manufacturers face difficulty while exporting, especially to Africa and Sri Lanka where there is a potential market.
"Besides, India does not face any problem in exporting motorbikes to our country but we have to pay 140 to 155 per cent duty while it is 157 per cent for Thailand," he said.
He suggested that the supplementary duty on CKD should be 45 per cent like the CBU. He also demanded cut in duty of raw materials for producing motorcycles.
He expects to increase value addition in the motorcycle manufacturing industry upto 50 per cent by 2014, which is now 20 per cent.