Board of InvestmentPrime Minister's Officewww.boi.gov.bd

AUTOMOBILEAn untapped sector waiting for exploration

Bangladesh…The most preferred

investment destinationin South Asia

Latest NewsProton is planning to set up a car plant in Bangladesh “soon” according to reports by the Bangladeshi media. This was revealed after Proton chairman Tun Dr Mahathir Mohamad met Bangladesh Prime Minister Sheikh Hasina.

This may come as a surprise to many, although it’s not the first time a Proton factory in Bangladesh has been mooted. In September, 2014, Dhaka Tribune reported that Proton expressed keen interest in setting up a joint venture car manufacturing plant in Bangladesh

Why Bangladesh• Bangladesh offers the most liberal FDI regime in

South Asia. There is no limit on equity participation and repatriation of profits and income.

• Tax holidays and accelerated depreciation is also allowed.

• Businesses exporting at least 80% of goods or services qualify for duty free import of machineries and spares and bonded warehouse facility.

• Cash incentives for selected products.

• Equal treatment for local and foreign investors.

• Foreign investment is protected from expropriation and nationalisation by the ‘Foreign Private Investment (Promotion & Protection) Act 1980’.

• Complete duty and quota free access to EU, Japan, Canada, Australia and most other developed countries.

• Investors can repatriate dividend and capital at exit.

• Young and energetic work force, nearly 60% of the total population is economically active and almost a million graduates enter the workforce annually.

• Bangladesh is a signatory to ICSID, UNCITRAL, OPIC, MIGA, WAIPA, WIPO an WTO.

Board of InvestmentPrime Minister’s Office

Jiban Bima Tower (19th Floor)10, Dilkusha Commercial AreaDhaka-1100, Bangladesh.

Phone : +880-2-957 7271Fax : +880-2-956 2312E-mail : service@boi.gov.bd Web : www.boi.gov.bd

Some Automobile Industries ( Assembling & Manufacturing )

IntroductionTransportation is one of the major industrial sectors of a society. As the country is developing more and more, the demand for vehicles is also rising. Over the last few years, the unemployment rate went down and foreign investment increased. As a result, many individuals can now afford personal transportation facility. Especially in capital Dhaka and port city Chittagong the demand of cars, motorbikes and commercial vehicles are much higher.

Toyota has always been the favorite brand for the people of Bangladesh. This Japanese manufacturer is selling the most number of cars in the world (Toyota corolla is the best-selling model of the world). The production of Toyota cars is ever increasing in Bangladesh. Even for commercial vehicles, this is still the favorite brand. The Indian brand Bajaj is most popular for motorbikes. Recently Bangladeshi Brand Walton is also coming on focus (Annual production 200,000) for motorcycles. By 2015 they are going to enter the automotive industry.

Current ScenarioCurrently in Bangladesh, there are many new and reconditioned cars available from different companies. But there is no local car or automotive manufacturer yet. But, a state running company called “Pragoti” has been manufacturing Mitsubishi vehicles at a low rate. Though there is no automotive industry in the country, there are some companies that manufacture motorcycles. Since two stroke engine vehicles are banned in the country, the demand of motorcycle has increased. In 2003, when Baby taxis were withdrawn from Dhaka city, many people realized the demand of motorcycle.

Bangladesh has a huge demand of automobiles for the increasing population and we have to import cars from abroad since there is no local car company. In Bangladesh, more than 80% cars are coming from Japan. To Tackle this situation, government has barred import of cars which are older than 4 years from the manufacturing date and also surcharged the taxes on import of new cars to discourage the import of reconditioned cars.

Till now, the automotive market in our country has been dominated by Japanese, Korean, Chinese, German, Indian and other car companies. Now if an automotive industry is set up in Bangladesh, it will surely improve current scenario and thereby contribute to country’s development.

Environmental ConcernVehicles are the major cause of air pollution in Dhaka. Especially vehicles that run in diesel pollutes the air more. French company Renault manufactured Twizy, Ford brought The Focus Electric which completely runs on electric power and are not harmful for environment at all. But in Bangladesh, there is no single electric car charge station and the environmental awareness is much lower than the industrialized countries of the west. Therefore it may take a long time for Bangladesh to start importing electric cars. But CNG auto rickshaws have been a great alternative so far. It is clear that the vehicles industry will grow more and more over time as districts like Sylhet, Khulna etc. are also being developed fast. In addition more and more brands are getting interested in opening manufacturing factories in Bangladesh.

• Pragoti• Bangladesh Machine Tools Factory• Aftab Automobiles• HS Enterprise• TATA Motors Bangladesh. (JV with Nitol-Niloy)• Walton Hi-Tech Industries Ltd.

• Runner Automobiles• Singer Bangladesh Limited• Bangladesh Honda Private Limited• TagAZ Bangladesh• Uttara Automobile Manufacturers Ltd.

Automobile Industry Heads Current Scenario Local Demand $ 2.5Bn Raw material source(Local: Imported) 5:95 Future Investment possibility $ 2.5-3 Bn Future employment option 1.5 m Import situation 2.01 Bn

Products Brand NameHeavy Bus Hino, Mitsubishi, Isuzu, Volvo, Tata, Ashok Leyland etc.Mini bus Hino, Mitsubishi, Isuzu, Toyota, Sawraz Mazda, Tata, Eicher etc.Microbus Nissan, Mitsubishi, Toyota etc.Heavy truck Hino, Tata, Bed Ford, Isuzu, Ashok LeylandMini Truck Hino, Tata, Mitsubishi, Isuzu, Toyota, Eicher, Sawraz, Mazda etc.Motor Car Toyota, Mercedes Benz, Nissan, Mitsubishi, Ford, Suzuki, Dewoo, Proton Saga, Proton Vira, Hyundai, BMW, Maruti etc.Four wheels Toyota, Tata, Mitsubishi, Nissan etc.Auto tempo Bajaj, KrishanScooter Bajaj, KrishanMotor-cycle Honda, Xingfu, Jialing, Jangshen, Yamaha, Suzuki, Hero, TVS Victor, Bajaj Vespa etc.Light & heavy commercial vehicles Nissan, Dewoo, Hyundai, Volvo, Ashok Leyland, Tata, Hino, Mitsubishi etc.Farm and agricultural vehicles Hyundai, Dewoo, Dongfang, Dongchang etc.