Local auto assembly gains steam

Bangladesh is set to soon witness local assembling of cars of a third international brand. 

An assembly plant for motor vehicles of South Korean carmaker Hyundai is expected to go into operation through its local distributor, Fair Technology, on January 19.

The plant is situated at Bangabandhu Hi-Tech Park in Kaliakoir of Gazipur, some 25 kilometres north of Dhaka.

For the past couple of years automobiles of Japanese brand Mitsubishi Outlander and Mitsubishi Pajero were already being assembled by Rangs, a concern of Rangs Group, and state-run Pragoti Industries while Malaysian Proton by Chattogram-based PHP Family.

The arrival of the third brand is coming at a time when auto sales are expanding in Bangladesh driven by demand from a rising middle class.

Roughly, 22,000 reconditioned cars are imported each year.

In 2022, 10,240 sport utility vehicles (SUVs) were registered with Bangladesh Road Transport Authority (BRTA) whereas in the previous year it was 7,602.

According to the BRTA data, registration of SUVs has been rising over the past decade thanks to a growing affluent class alongside development of road conditions.

Sales of SUVs and luxury cars grew at an annual average of 40 per cent in Bangladesh in the past decade as more people, armed with rising income, are buying automobiles in higher numbers.

Though the domestic market for brand new cars is slowly expanding, local assembly is beneficial in terms of the price reduction it enables thanks to lower tariffs on completely knocked down (CKD) kits.

Initially the most popular Hyundai SUVs, sedans and multipurpose vehicles will be put together in the Gazipur plant.

Fair Technology entered into a strategic partnership with South Korean automobile giant Hyundai Motor Corporation in 2020 and started to bring over passenger vehicles to Bangladesh.

Hyundai Creta of 2023, assembled in Indonesia, is already available in the Bangladesh market.

This too will be assembled in Bangladesh, said Hasnain Khurshed, head of communication of Fair Group.

"We imported around 1,650 components to assemble the Creta model," he said.

Hyundai Creta has a 1.5-litre engine, 17-inch diamond alloy rims, a panoramic sunroof, and a 10.25-inch advanced cluster housing various operational displays and indicators.

Khurshed expects locally assembled Hyundai motor vehicles to be available in the market by the end of January.

Sources in Fair Technology said their plant was set up with the aim to provide affordable SUVs to consumers in Bangladesh.

Original spare parts and world standard after-sales service will be ensured, said Khurshed.

He, however, declined to disclose the amount of investment made and what a locally assembled Hyundai Creta would cost.