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Bangladesh Honda Private Limited
Proposal for industrialization of the motorcycle business
in Bangladesh
25/Jan/2016
Cost per km for each transportation mode in Dhaka City
20 BDT/km 60 BDT/km 0.8 BDT/km
Motorcycle is essential means of transportation for people
Economical, convenient & easy handling
Motorcycles are well accepted and can be seen anywhere in the world.
1 litter of Petrol 95 BDT
Mileage is 74km per litter
渋滞知らず
手軽で便利
118
146
190
255
230220
184175
142
0
50
100
150
200
250
300
2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16
(,000)
Bangladesh 2 wheelers market trend
Total Wholesales units data
Forecast
142000台という数字を他国と比較してみると
6,780
2,700
1,660 1,440
900 800 420 300 250 140 142
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
2 wheelers market size vs Population size 2015
252
91
69188
51
9931
157
21
158
Population (Million)
(‘000)
India Market size 1.6 crorePopulation 1.3 billion
Extremely high retail price compared with same model in India
142,000
170,000
218,000
63,000 73,500
89,000
0
50,000
100,000
150,000
200,000
250,000
Dream Neo110cc Shine 125cc Trigger Dx 150cc
BDT
2.3times
2.3times
2.4times
なぜ人口も巨大で一人当たりGDPも1000ドルを超えているのに
こんなにマーケットは小さいのか？
209
286
111
344325
264
784.7
3.8
7.0
3.1 3.13.2
22.9
0.0
5.0
10.0
15.0
20.0
25.0
0
50
100
150
200
250
300
350
400
Wage and RatioUS$ MonthWage : Data from Jetro
By how many month of wages each city workers can purchase 100cc motorcycle ?
2wheelers are the best selling 100cc model in each market
CKD up to 2015 Jun
Import Price
50,000
Rate E. Rate Amount
CD 25% 25% 12,500
RD 5% 5% 2,500
SD 30% 39% 19,500
VAT 15% 25% 12,500
AIT 5% 5% 2,500
ATV 4% 9% 4,500
84% 108% 54,000
104,000Total
Import Price
50,000
Rate E. Rate Amount
CD 25% 25% 12,500
RD 5% 5% 2,500
SD 45% 58% 29,000
VAT 15% 28% 14,000
AIT 5% 5% 2,500
ATV 4% 9% 4,500
99% 130% 65,000
115,000Total
CKD (New Budget from Jul 2015)
Reason : Extremely high Custom and Duty Tax
50,000 BDT is just sample
VS
10,4000 ÷50,000= 2.1times 11,5000 ÷50,000= 2.3times
118
146
190
255
230220
184175
142
0
50
100
150
200
250
300
2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16
(,000)
Bangladesh 2 wheelers market trend
Total Wholesales units data
Forecast
SD20 to 30%
SD30% to 45%
proposal
WIN-WINLOSE-LOSE
The Basic concept of the proposal
Expanding
MC market
Appropriate
Duty & Fee
MC as a
mobility for
everyone
More Gov.
Revenue &
Employment
【Future】 “Positive” cycle
Rapid
Industrialization
The Basic concept of the proposal：
Accelerating industrialization from the MC industry.And we wish to realize “WIN-WIN-WIN-WIN” relationship” among
“consumers”, “employee”, “Government” & “MC industry”
Shrinking
MC market
High duty
& Reg. Fee
MC as a
luxury item
Less Gov.
Revenue &
Employment
【Current】 “Negative” cycle
Delayed
industrialization
“Review on policy”
• Review the definitions
of “domestic industry”
• Duty exemption for
parts and equipment
for production
• Reduce Reg. fee
• Nurture backward linkage
Bigger MC marketMore Government revenue
& employment
We propose to review the current “domestic MC industry protection policy” which is not working properly
Small MC marketLess gov. revenue
& employment
Divide the parts into 5 category based on “technical difficulty” & “investment size”
【§3-2】 Proposed direction for industry localization in Bangladesh
A majority of MCs in Bangladesh are in the range of 100-150cc and approx. 800-
1,000 kinds of parts make up a MC. For example, a 125cc MC called “Shine” from
Honda consists of 870 kinds of parts. Hopefully, all of the parts are to be localized
in Bangladesh, but the difficulty of manufacturing differs from part to part.
・Current market size and its conditions does
not justify a big investment
・The suppliers are still at their “initial stage”
We propose a “Stepwise
industrialization” from the
basic steps”
§1
Current status and potential of the MC industry in Bangladesh
§2
Duty/tax issues for the MC industry
§3
Proposed direction for industry localization in Bangladesh
§4
Proposed revision in the duty/tax structure and the MC registration fee
§5
Positive impact on the national economy
§6
Conclusion
Roadmap: Abstracts and Presentations
1. Development of skilled labor and
exchange of technical knowledge:
2. Development of backward linkage
for supplying parts including SME and
a large scale industry:
Positive Impact from 2 Wheelers industry
2 wheelers
industryConsumer
Country
(Gov.)
1. More revenue generation from duty, tax and VAT:
2. Generating employment opportunity:
3. Encouraging foreign direct investment (FDI):
4. Protection of outward remittance and reducing
the dependency on imports:
5. Reduce traffic jams in big cities:
1. Affordable price
2. Living cost down
3. Independence
Win-WinWin-Win
Win-Win
§1
Current status and potential of the MC industry in Bangladesh
§2
Duty/tax issues for the MC industry
§3
Proposed direction for industry localization in Bangladesh
§4
Proposed revision in the duty/tax structure and the MC registration fee
§5
Positive impact on the national economy
§6
Conclusion
【§6】 Conclusion
Under the leadership of the Honorable Prime Minister Sheikh Hasina, the
Bangladesh Government has a national vision to become a middle income
country by 2021, achieving a GDP growth of 8% and creating 10 million jobs
in the coming 15 years. In the last couple of decades, the MC industry has
supported the growth of many countries, including ASEAN countries, like
India and Pakistan. We believe we can achieve the same in Bangladesh.
In this report, we have tried to propose a process of industrialization, i.e.
progressive manufacturing, in a concrete form. Despite the fact that
everyone in the Bangladeshi motorcycle industry is committed to the
progress of the national economy, we are not able to achieve the goal
without the understanding and support of the Government.
Please give consideration to the matter so that we can contribute to
Bangladesh more than ever.
Roadmap: Abstracts and Presentations
Thank you
