Commercial vehicle sales growing rapidly
18 August, 2018
Sales of commercial vehicles are growing rapidly in Bangladesh thanks to the increasing economic activities in the last one decade.
At least 35,000 units of commercial vehicles such as bus, truck, auto-rickshaw, cargo van, human-hauler, pickup and tanker were sold last year, way higher than 2,000 units 10 years ago, said Abdul Matlub Ahmad, chairman of Nitol-Niloy Group.
At present, the market size of commercial vehicle is about Tk 4,200 crore whereas it was about Tk 2,000 crore a decade ago, he said.
“Bangladesh is a potential market for commercial vehicles as the economy is booming,” said Hafizur Rahman Khan, chairman of Runner Group.
“The demand for commercial vehicles will continue to grow as you need vehicles for moving products as well as people's movement.”
The market size of commercial vehicles grew 15 percent to 20 percent every year over the last one decade, he said.
Data from the Bangladesh Road Transport Authority (BRTA) showed it registered 7,808 units of truck in the seven months to July this year.
The number stood at 10,353 units in the full year of 2017; 7,275 in 2016; 6,330 in 2015 and 8,136 in 2014.
The state agency this year registered 1,980 units of bus as of July while the figure hit 3,760 in the 12 months of 2017.
Some 282,354 units of commercial and passengers cars were registered till July in 2018 and the number stood at 420,398 units in 2017. The rapid growth of sales of commercial vehicles began in 2014 and it is increasing every year thanks to steady economic activities, said Ahmad.
The automotive industry in Bangladesh is largely dominated by imports of reconditioned and new vehicles, mostly from Japan, China, and India and a few from Europe and the US.
Commercial vehicles are imported from India mainly due to competitive pricing and availability of spare parts, Ahmad said.
The automobile manufacturing and assembling industries have not grown in Bangladesh in the last three decades because of a lack of raw materials and the backward linkage, according to a review of non-bank financial institution IDLC.
Now, Runner Motors, Nitol Tata, Ifad Autos and Rangs Motors have set up small-scale assembly plant in collaboration with foreign companies such as Hino, Mitsubishi, Tata Motors, and Ashok Leyland to assemble cars, trucks, pickups and buses.
In the commercial vehicle segment, Nitol has 40 percent market share, Ifad Auto holds 38 percent and Runner Motors 10 percent, according to the IDLC review.
Khan of Runner Group said local entrepreneurs will soon go for automobile manufacturing in the country.
“The first step for an automobile manufacturer is to set up an assembly plant before going for manufacturing. Some local entrepreneurs have set up assembly plants. Now, the country is on track to manufacture automobiles.”
He said Runner Group would start commercial vehicles assembling in his own factory by 2019.
The group will assemble trucks in its plant set up at a cost of Tk 300 crore.
There are 14-16 large automobile retailers in Bangladesh. Of them, 5-6 have assembly facilities, while the rest are sole distributors or importers, according to the industry insiders.
Ifad Autos, Aftab Auto, Navana, Rangs, Rancon Motors, Nitol Motors, Runner Motors and AG automobiles are the major distributors.