Nayeemur Rahman, Head of Business Planning, Uttara Motors Ltd. Which is the front runner and carrying the crown of the most leading automobile company in Bangladesh., shares his perspectives on the COVID-19-era challenges of leading a major local automobile company, and the opportunities just up the road.
1. How did the automotive industry fare this 2021?
The rapid growth of our economy and people's purchasing power has seen a rise in demand for a vehicle for personal transportation. The covid-19 pandemic also hits the market to the worst. But it is expected that the automobile market will be back as the economy is recovering fast. People are buying more cars than ever before, being able to pay their way through the duty inflated prices. Even, around 1 crore 20 lakh middle-class people of Bangladesh are earning enough to own a car and are willing to have one. This population class has a growth rate of 10% per year as well. According to BRTA, the total no. of registered P/C vehicles was 12403 units in 2020 which were raised to 14785 in 2021. To support the higher demand, more and more transport manufacturers have set up or set up plants for local production.
2. Have you suffered any barriers in the automobile industry over the last few years?
In the year of pandemic restrictions, the border was closed, the supply chain was disrupted, and companies suffered extensive losses. Moreover, to contain road congestion by making automobiles expensive, and to collect a large sum of reveling through the imposition of duties and taxes from car imports, the govt. has imposed very high duty and tax rates on imported brand new cars increasing the prices which made them harder to afford even for the upper-middle-income peoples. Most of the taxes are imposed in the form of supplementary duty (SD) levied at rates ranging between 20% to 500% for cars Recently, the government has also imposed one hundred and fifty percent road tax who owns a second car. Hence, it is getting hard for a person to get a second car. Hence, we are facing an immense problem with generating new sales.
3. What changes do you expect to see in the automobile industry in upcoming years?
Considering the socio-economic condition and the lifestyle of the people, the government should take some initiatives like the import duty should be reduced and additional AIT for owning one more car should be reduced as now a day’s cars becoming more necessity than a luxury. Also strict and immediate rules should be imposed to import reconditioned cars to ensure environmental and road safety.
4. In our country; one of the major barriers is the lack of skilled and technical manpower. How can the public and private sector bridge this gap through investment?
Yes, a critical concern is the lack of skilled and technical manpower. Currently, the manpower is in an infant stage, so creating skilled and specialized manpower is now mandatory to develop the industry. Privately, local manpower can be skilled with the contiguity of overseas technical experts. The government can initiate a long term learning process through vocational education and training centres in partnership with foreign countries and institutes. Currently, some are taking place with NGOs and local entrepreneurs but it’s not sufficient. Private investments in this sector will only increase when there is support from the government in the form of long term structured policies for doing business in the automobile sector as a whole. Only then can this gap in skilled manpower be eventually bridged. This will also lead to huge employment generation and development of light industries in the country.
5. Traffic congestion in Dhaka city is caused by the large number of vehicles, lack of roads, and overpopulation;is UML doing anything to create mass awareness about traffic rules?
To aware and educate people, Uttara Motors is offering our customers an easy driving registration policy, so that customers can easily get their driving license. Concurrently, we are doing an awareness campaign digitally in all our social pages. We are also in the process of initiating a mass awareness campaign in partnership with BRTA in the ground levels. In this joint effort, we are going to organize seminars and BTL activities to make people aware of traffic rules in all divisions of the country.
6. What are your hopes in the automobile sector in the coming days?
Although the automobile industry of Bangladesh is more developed than before, so far it has not achieved the expected success. Considering hybrid cars, import duty policies will bring sustainable growth in the future. Along with the growing GDP of Bangladesh, people’s buying power is increasing gradually. Similarly, people’s lifestyles are changing as well. So, the usage of personal cars will raise for sure. If the government emphasizes the automobile assembly and manufacturing sector, one day we might see “Made in Bangladesh” cars will be fulfilling the local demand of this country.
“Made in Bangladesh cars will be fulfilling the local demand”