Auto firms step on the gas in Bangladesh; Likely to be next hub

As Sri Lanka battles an economic crisis, the new destination for Indian auto companies seems to be Bangladesh, which is on the brink of a major economic boom, making auto majors look eastwards.

Tata Motors, Ashok Leyland, Mahindra and Bajaj Auto have stepped up their game through joint ventures and begun identifying homegrown distributor groups to assemble a major portion of their products in Bangladesh. These companies are firming up launches and ramping up capacity as they offer a very high level of customisation to customers, reinforcing the product portfolio across all segments in the region, experts said.

“Automobile majors are working with the government, industry associations and with SIAM (Society of Indian Automobile Manufacturers) to help develop an auto policy that serves the needs of customers and the local industry. We are looking forward to introducing high-end bikes, fuel efficient CNG 3Ws and in due course, EVs,” said Rakesh Sharma, ED, Bajaj Auto, a leader in 2&3 wheelers in Bangladesh.

“We actively support our distribution partners through local manufacturing, financing and go-to-market operations,” added Sharma.

Tata Motors is the largest commercial vehicle brand, including small & heavy CVs and buses, in Bangladesh with a two-third share. “It continues to invest in Bangladesh in developing a suitable product portfolio to serve our customers, building a wide network of sales & services, and expanding our CKD assembly facility in Jessore,” said a TaMo spokesperson.

Indian auto OEMs have focused on building their presence in the South Asian, African and Middle Eastern markets over the last few decades. In the economic downturn caused by Covid, the Bangladesh market continued to sparkle while most others suffered, said Kaushik Narayan, CEO of Leaptrucks, a platform for the sale of trucks and buses.

Emission standards in Bangladesh also lag India’s and other developed nations. With a wide range of value for money products available in their portfolio across multiple emission standards, matching terrain and weather conditions, Indian OEMs are uniquely positioned to cater to the requirements of the Bangladesh market, Narayan said.

It’s an India-like market, so auto OEMs find it easier to service such customers, said Kavan Mukhtar, head, auto practice, PwC.

Mahindra Automotive, which works with the local partner Rangs Group, has established itself in the pick-up segment. In tractors, Mahindra is exploring possibilities of local assembly of some specific products which will help the Bangladesh government in their program of ‘Make in Bangladesh.’

“We are also exploring possibilities in the aggrotech space to help farmers achieve higher yields and prosperity. Mahindra has partnered with the Karnaphuli Group and Rancon Group for distribution of products”, said a Mahindra spokesperson.

Chennai-based truck major Ashok Leyland, through its channel partner IFAD Auto, sells 65% of its locally assembled light and medium commercial trucks and buses in Bangladesh.

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