The Indian automobile industry is deepening ties with Bangladesh by organising a motor show there in February 2017.
For the first time, the Society of Indian Automobile Manufactures (Siam) will be partnering with its counterpart in Bangladesh to organise the show.
The event, to be known as the Dhaka Automotive Show, will see leading Indian automobile and component manufacturers participating. It is learnt that top Indian companies Maruti Suzuki, M&M, Tata Motors, Ashok Leyland, Hero MotoCorp and Bajaj Auto, among others, have expressed interest in participating. The Automotive Component Manufacturers Association of India, the apex body of auto component makers, will also be a partner.
“A large delegation from Bangladesh visited us last week. They are trying to understand how automobile manufacture has developed in India. Together, we have decided to organise this expo in Dhaka,” said an official at Siam.
Indian companies export cars, two-wheelers and commercial vehicles to Bangladesh, which has no manufacturing base. Bangladesh depends on imports from countries such as Japan, Korea and India.
The Indian industry is keen to expand sales to Bangladesh. “We have to explore the markets around us. Bangladesh has a potential for growth in automobiles. They have done well as an economy and their per capita income is now close to $1,500,” the official added.
A number of Indian companies have assembly units in Bangladesh. Tata Motors has a joint venture assembly unit with Bangladesh’s Nitol Motors and sells commercial and passenger vehicles. Commercial vehicles major Ashok Leyland is setting up an assembly unit in Bangladesh with a local partner. India’s biggest two-wheeler maker Hero MotoCorp is setting up a manufacturing unit with the Nitol Niloy Group, which also has a partnership with Tata Motors. The unit, with a capacity to produce 150,000 units, will become operational in 2017. Tyre maker Ceat is also setting up a unit with a Bangladesh company. The expo will give a bigger platform to all these players.
Outside India, Siam used to organise expos in Sri Lanka but discontinued it in some years ago due to problems of high taxes on import of automobiles in the island nation. Annual sale of cars in Bangladesh is estimated to be around 50,000 units. However, a bulk of the cars are reconditioned (refurbished used) ones, imported from countries like Japan. India exports new vehicles to Bangladesh. However, both refurbished and new vehicles attract the same import duty, ranging from 45 per cent for vehicles below 1,500cc, 100 per cent for vehicles between 1,500 and 2,000cc and so on. The two-wheeler market is estimated at about 200,000 units a year.