Expand Domestic Car Market for Automotive Industry: Speakers

Speakers at a webinar on Wednesday said Bangladesh needs to expand its domestic car market to develop the automotive industry as the registered vehicle per capita is only 0.003 percent in the country.

They also emphasized the formulation of a comprehensive automotive sector policy integrating road and traffic management in order to develop the domestic car industry.

The Policy Research Institute (PRI) of Bangladesh arranged the webinar titled 'Car Market in Bangladesh: Challenges and Prospects' through the zoom platform.

''Unless we can increase car ownership and domestic demand, no major car manufacturers will be interested to open and operate large manufacturing plants in a competitive Bangladesh market,'' said PRI Executive Director Dr Ahsan H Mansur.

He said the development of the domestic car industry must require a sizable domestic market, which is currently absent.

Dr Mansur in his presentation mentioned that the registered vehicle per capita in Bangladesh is only 0.003 percent, which is even lower than 0.129 percent in Myanmar. The vehicle per capita is 0.031 percent in Vietnam, 0.099 percent in the Philippines, 0.548 in Thailand, 0.500 in Indonesia and 0.897 percent in Malaysia.

He said the extremely low number of car ownership in Bangladesh is a reflection of a number of factors including low income, extremely high duty and tax rate imposed on cars, extremely congested roads, poor traffic management, absence of public or private parking system, poor quality of roads, and very high maintenance costs due to costly auto parts.

Noting that car imports and domestic sales have been falling in Bangladesh, he said some 20,149 cars were imported in 2016-17 fiscal year, 23,075 cars in 2017-18FY, 12,502 cars in 2018-19FY and 4,702 cars (July-Dec) in 2019-20FY.

Dr Mansur said Bangladesh does not yet have a comprehensive national motor vehicle policy, though the government has drafted an Automotive Sector Development Policy (ASDP) aiming to increase the production of commercial and passenger vehicles and motorcycles.

'Electric vehicle is the future'

Addressing the function as the chief guest, Prime Minister's Private Industry and Investment Adviser Salman F Rahman said the road management improvement and traffic management improvement must be parts of ASDP.

He also put emphasis on expanding the local market of cars by revising the tax structures.

Salman F Rahman said Bangladesh should promote the manufacturing of electric cars. ''Future policy should be geared towards the 4th Industrial Revolution and the electric car market,'' he said.

"Electric vehicle is the future and the focus should be on mastering new technologies. Developing infrastructure for a falling field is of no point, and not a sustainable option. Climate change is very real,'' he said.

The PM’s adviser said the charging station and battery production of electric cars is going to be a huge business all over the world. ''If we don't act fast, we'll miss the bus. Technology does not wait for anybody.''

Former chairman of National Board of Revenue (NBR) Dr Muhammad Abdul Mazid said Bangladesh should go for manufacturing automobile parts and other backward linkage industries first and then for car manufacturing.

Chairman of Policy Exchange Dr M Masrur Reaz said Bangladesh will have to create at least the demand of 100,000-150,000 cars annually to make the local car production viable.

Former Lead Economist of the World Bank Dr Zahid Hussain moderated the seminar, while Joint Secretary of Industries Ministry Anwarul Alam also spoke on the occasion.