Experts and stakeholders have called for appropriate policy support, incentives and tax benefits as these can foster the local automobile industry.
In this regard, Mr Rizwan Rahman, president of Dhaka Chamber of Commerce & Industry (DCCI) said at least 5-10 years sustainable tariff policy should be taken to support the local vehicle assembly and manufacturing industry.
He said this in a webinar titled ‘Automobile Industry Development: Present Situation & Future Prospects’, held on Sunday.
Speaking at the event as the chief guest, Industries Minister Nurul Majid Mahmud Humayun said if required a comprehensive policy will be pursued specifically for this industry.
Ambassador of Japan to Bangladesh Ito Naoki, who participated in the programme as the special guest, said Bangladesh has a strong possibility to establish its own local automobile industry.
“When we talk about export diversification, the automobile, light engineering and the agriculture-based sectors can play a vital role”, he said.
Mitsubishi Motors showed interest to invest in Bangladesh in the CKD assembly plant, Mr Naoki informed.
“It will create technology transfer and employment opportunities in Bangladesh”, he said.
Last month, Mitsubishi Motors and the Ministry of Industries agreed to sign an MoU to conduct a feasibility study on the investment.
Mr Naoki also urged the government to provide policy support, tax benefits and incentives for the growth of the industry.
Mr Rahman said Bangladesh’s automobile sector is dominated by imported brand new and reconditioned vehicles, mostly from Japan, China, India, Europe and the United States.
Considering the growing demand in the local market, local and foreign investors are now showing interests to invest in the automobile industry. Before the COVID-19, the automobile market was growing by 15 to 20 per cent per year with 12 per cent growth in auto parts, he said.
Mr Rahman also suggested establishing a separate Automobile Zone and allowing joint ventures to manufacture automobile parts, and thus create local experts.
The Industries Minister urged the private sector and foreign investors to set up spare parts and tools manufacturing units in the economic zones.
Taskeen Ahmed, Deputy Managing Director, IFAD Group, presented the keynote paper.
“After the completion of Padma Bridge, demand for commercial vehicles will grow considerably, he said in his keynote.
Md Touhiduzzaman, managing director of Pragati Industries Ltd, said more assemblers will boost the sector further.
Matiur Rahman, chairman and managing director of Uttara Group of Companies said we lag in this sector. A long-term policy and incentives will foster this sector.
“This is a promising sector which has the opportunity to attract private sector investment”, he said.
In the webinar, Syed Imtiaz Ahmed, president of Signal Stream Inc, Canada, said if Bangladesh can focus on manufacturing electronic control units (ECU) that are extensively used by car and other vehicles manufacturers, it will be able to grab a share of the world’s automobile industry very soon.
Abdul Haque, president of BARVIDA, said the taxation policy should be industry-friendly as the industry needs more consistent policy support.
Hayakawa Yuho, chief representative of JICA Bangladesh said an appropriate industrial policy is needed to protect and nurture the sector.
“Government may think of providing investment incentives to the private sector investors from home and abroad. The automobile policy should be carefully formulated and implemented since the situation in this sector changes regularly”, he said.
DCCI Senior Vice President NKA Mobin, FCS, FCA gave the vote of thanks.