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JP / IN - New Japanese auto plant to help Bangladesh economy

The launch of a Honda motorcycle assembly plant raises prospects for new employment opportunities.

Thanks to a Japanese automaker, Bangladesh finally has good news to celebrate after months of turmoil that caused considerable damage to the economy.

The Honda motorcycle assembly plant launched in Gazipur in December 2013 is expected to substantially reduce motorcycle imports and make them more affordable. Honda supplied 70% of the total Tk. 610m ($7.9m) investment, made in collaboration with the Bangladesh Steel and Engineering Corporation (BSEC).

Though Honda Bangladesh (BHL) only plans to assemble 10,000 CD-80 motorcycles in the first year despite an annual capacity of 80,000, it said it will increase the number gradually.

Siddiqur Rahman, who bought an imported Honda CD-80 a few years ago, is excited.

"This is an amazing motorcycle – very fuel efficient and less harmful to the environment," the Dhaka University employee told Khabar South Asia.

The domestic 70-cc two-wheeler gets 80km per litre and costs Tk. 11,000 ($142) less than an import.

At Gazipur, BHL operators plan to entirely manufacture the motorcycle within a few years after expanding its marketing and distribution facilities across Bangladesh. It currently has distributors only in Jamalpur and Tangail.

A growing market

Further, the new plant will cut import costs and save precious foreign exchange in the process.

"This is also going to create new job opportunities and help ease the prevailing chronic unemployment situation," BSEC director Mobarak Ali told Khabar.

"The demand for motorcycles is growing substantially every year and the reputation of Honda as being durable, fuel efficient and sturdy is a big plus for us to market the product," said Golam Rabbani, owner of Rupali Motors, appointed the new dealer in Jamalpur.

According to the Bangladesh Road Transport Authority (BRTA), 200,000 motorcycles were sold in 2012. Demand grows annually by 22%.

"Our aim is to produce cheaper, efficient motorcycles and make it affordable to a larger segment of the population. It's a huge market," BHL Managing Director Yoichi Mizutani told Khabar.

Some investors believe the backing of the new plant sends a positive signal to other potential investors.

"It's a matter of great hope and I'm sure Bangladesh's image as a prospective destination for foreign investment will be further improved with Honda's entry," Dhaka University economics professor Mohammad Taslim told Khabar.

Bangladesh will also gain from Honda's expertise in manufacturing, management and technological innovation to build an efficient workforce, he said. "That's how countries like India and China have developed their manufacturing base."

Source: Khabarsouthasia.com


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