Bangladesh Motorcycle Market has posted 24% year-on-year growth and this market would grow about 30% in 2019.
This market is set to be around 6 lakh units by the end of 2019 because of price cuts, increasing purchasing capacity and thrust for faster mobility.
The market began to expand fast since fiscal 2016-17. The reduction in supplementary duty on motorcycle parts import has reduced the overall cost of manufacturing motorcycle, cutting down the price of locally manufactured motorcycles in Bangladesh.
The popularity of ride-sharing apps is another catalyst to this growth.
The government also framed the National Motorcycle Industry Development Policy 2018 with a view to diversifying the country’s manufacturing and exports and creating jobs.
This policy is to increase manufacturing of motorcycle in Bangladesh to 0.5 million by 2021.
According to ACI Motors, which markets the Yamaha-branded two-wheelers, about 4.80 lakh units of bikes were sold in 2018.
The highest growth took place in the 150cc segment, followed by 110cc ones.
Overall, the market is expected to be close to 6 lakh units by the end of 2019.
The reason for the optimism is that motorcycles became more affordable thanks to local manufacturing by most of the brands.
The annual market size would grow to 10 lakh units within three to four years.
The government has set a target to increase the capacity of yearly motorcycle production to 1 million in 2027 which will also create employment opportunities for 15 lakh people.
The lack of vendor development for manufacturing required components and supply of those to manufacturers are the key restrains to this growth.
Indian brands are a real threat for local manufacturers because Indian brands hold lions’ share of the market.
As the manufacturing cost of the motorcycle is reduced and demand growing fast, foreign brands have a strong motive to establish the plant in Bangladesh which will allow customers to have a quality motorcycle with lower price.
The industry is yet to reach full potential. Adequate infrastructure and policy continuation by the government is necessary for the sector.