The chief of state-owned Atlas Bangladesh has been presenting a new plan at the annual general meeting every year for the last eight years to turn around the business, but not a single idea has been put into action.
In continuation of the practice, he has devised a proposal to steer the company's business to electronic bike manufacturing, which he is going to place at this year's meeting on December 28.
In a telephonic conversation, Azibor Rahman, managing director of Atlas Bangladesh, also unveils another goal to generate revenue -- setting up a helmet manufacturing plant.
He claims there is a demand for electric bikes in Bangladesh. Companies, such as Akij and Walton, have been selling electric motorbikes. While Bangladesh has well-established petrol-run motorbike brands, Bangladesh Honda and Hero Honda for example, there are no good brands of electric bikes, says Mr Rahman.
"Our plant is ready for electric bikes. If we get permission from the industries ministry, we will bring parts and assemble them," adds Mr Rahman.
Atlas Bangladesh was once a market leader, operating in collaboration with Japanese brand Honda and Indian brand Hero Honda. Its fall began after both the foreign motorbike makers broke away from their partnerships with the Atlas in 2010.
In FY11, the Atlas's revenue was around Tk 5.8 billion, earning a profit of Tk 298 million. Twelve years later in FY23, the revenue shrank to Tk 28 million, rendering a loss of Tk 97 million.
Experts say that in decades of business relations with Hero and Honda, the Atlas could not equip itself with technological innovations to strengthen its business model, whereas in India Hero MotoCorp has established itself as a top motorbike brand through technology transfer after the end of its 26-year-long partnership with Japanese brand Honda in 2009.
A. K. Enamul Haque, a professor of economics at East West University, says automobile companies relying on assembling will not enable themselves for technology transfer.
"They make money by way of tax evasion."
Companies have to set up plants for manufacturing some parts, said Mr Haque. "We should negotiate with brands for that. If we start making some parts, one day we will be ready for technology transfer.
"We do not have such plans and do not have the negotiation capacity. Neither do our firms have the required research and development capacity."
Explaining how technology transfer may work, Mr Haque said Maruti was an example of unsuccessful attempt at technology transfer for it did not have any R&D segment but the founder of Honda had learnt how to make piston while working in Toyota, which he later developed and deployed in Honda.
Flawed business deals threatening Atlas's existence
For the last eight financial years, the company has been counting losses.
According to its financial statements, the cumulative loss stands at Tk 466.68 million until FY23.
After the departure of Hero Honda and Honda, it sold off the remaining stock of the bikes of the brands. The Atlas tried but failed to partner with any other Indian or Japanese brands.
In 2016, the company signed a two-year contract with the Chongqing Zongshen Motorcycle Group, one of the top five two-wheeler manufacturers in China, for importing, assembling and marketing their motorcycles. The deal was later extended for two years.
Motorbike buyers have not shown much interest in Zongshen motorcycles. Hence, the sales have not picked up.
In Bangladesh, the two-wheeler market is significantly dominated by India-made products, no matter where the brand originated from, say industry representatives. Availability, cheaper motor parts and brand image of Indian two-wheelers are the main reasons behind Zongshen's failure, they say.
Though Atlas terminated its agreement with the Chinese company in 2020, it still has Zongshen motorbikes in its inventory, which it wants to clear off through sales at a heavy discount, said Azibor Rahman, managing director of the Atlas.
Since 2018, the Atlas has a partnership with TVS Auto Bangladesh, a subsidiary of Indian two-wheeler manufacturer TVS Auto.
The deal was limited to selling TVS motorbikes to government entities, a faulty business model to begin with. TVS Auto Bangladesh has been running as a separate business entity, selling motorbikes at the retail level.
Under the contract, the Atlas purchases motorcycle parts from TVS and assemble those.
Through the deal with the Atlas, TVS Auto grabbed the entire business of motorbike sales to state-run entities. On the other hand, the Atlas witnessed a steep fall in revenue when the government stopped vehicle purchase in one of the austerity measures against the backdrop of economic slowdown.
Failed ideas
In FY17 annual report, the Atlas said it was going to renew its partnership with Honda and that Chinese Zongshen group would also help it regain its market share. That did not happen.
In FY18, the company assured its investors of capturing the market with TVS bikes. It unveiled its plan to make "green" bikes, energy-efficient ceiling fans, moor parts, solar-based three wheelers and four wheelers. The plan has never been acted upon.
In FY19 annual report, the company said it would sell bus, truck, generator and AC filter in a repeated attempt at making hollow promises. The following year, the company devised another plan to produce oxygen, by setting up an oxygen plant. Then in FY22, it put forth a proposal to make electric bikes and petrol-run bikes but none of the plans has come to fruition.
Why Honda and Hero Honda left Atlas
Japanese two-wheeler maker Honda Motor was with Atlas Bangladesh from its inception in 1966. Atlas began its journey as a venture of privately-owned Siraji Group in technical collaboration with Honda. The company was nationalised a year after independence.
In 1988, the government shared minority ownership of the company with general stock market investors.
Honda Motor was with the Atlas for more than 40 years. In 2009, Honda decided to discontinue business in joint ventures in the Asian region. It left Hero MotoCorp in India and the Atlas in 2010.
"We persuaded Honda into making another deal [in continuing its operation in Bangladesh]. Currently, Honda is operating as Bangladesh Honda Private Limited (BHL), where Bangladesh Steel and Engineering Corporation (BSEC) has a stake of 30 per cent," said Md. Moniruzzaman, chairman of the Corporation.
The Corporation has nine state-owned organisations operating under it, and one of those entities is Atlas Bangladesh.
The partnership with Indian Hero Honda began in 1993 to assemble the company's motorcycles in Bangladesh. After Honda left in 2010, Hero Honda ended its deal with the Atlas.
At present, Hero Honda is working with Nitol Niloy Group of Bangladesh.
Asked if the Atlas is ready to make electric bikes, its chief says the company will assemble motorbikes and in two-three years it will make further developments.
"Fund will not be a problem. We will be able to secure a loan if needed. We may also get funds from Bangladesh Steel and Engineering Corporation."
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