Appropriate policy support, incentives, tax benefits and a sustainable tariff policy are needed to explore the potentials of local automobile industry, speakers said at a webinar on Sunday.
They also urged for a long-term and short-term policy to support local assembling and manufacturing of vehicles.Industries Minister Nurul Majid Mahmud Humayun, MP joined the webinar titled “Automobile Industry Development: Present Situation & Future Prospects” as chief guest.
Japan Ambassador to Bangladesh ITO Naoki also joined the discussion as special guest. Dhaka Chamber of Commerce and Industry (DCCI) organized the event.
“Private sector and foreign investors can set up spare parts and tools manufacturing unit in the EZs,” said Nurul Majid Mahmud Humayun.
“The government is relentlessly working for the industrialization of the country. If needed, a comprehensive policy will be pursued, especially for this industry,” the industries minister added.
ITO Naoki said, “Bangladesh has a strong possibility to establish its own local automobile industry. In terms of export diversification, the automobile, light engineering and agriculture-based sector can play a vital role.”
He said Japanese Mitsubishi Motors showed interest to invest in Bangladesh in the CKD assembling plant.Mitsubishi and Ministry of Industries came to an agreement last month to sign an MoU to conduct joint feasibility study on the viability of the investment, the Japanese envoy said.
“It will create technology transfer and employment opportunities for Bangladesh,” he added, calling for policy support, tax benefits and incentives to develop the industry.
DCCI President Rizwan Rahman said Bangladesh’s automobile sector is mainly dominated by imported reconditioned and new vehicles mostly from Japan, China, India, Europe and the USA.
Given the growing market demand, local and foreign investors are now showing interests to invest in the automobile industry.
Prior to the COVID-19, the automobile market was growing by 15 percent to 20 percent with 12 percent growth in auto parts yearly.
“Despite having potentials, the absence of long-term policy and consistent tax structure, lack of domestic source of raw materials and relevant skilled human resources, as well as inadequate backward linkage hindered the growth of the automobile manufacturing industry,” said DCCI chief.
He called for a long-term policy and a minimum 5-10 years sustaining tariff policy to support the assembling and manufacturing of vehicles in Bangladesh.
President of BARVIDA, reconditioned vehicles importers body, Abdul Haque said, “Taxation policy should be industry-friendly while the industry needs more consistent policy support.”
Pragati Industries Managing Director Md. Touhiduzzaman said the local manufacturers want vehicles to be manufactured locally. “The more assembler will come, the more the sector will boost,” he added.
Chief Representative of Japan International Cooperation Agency (JICA) in Bangladesh, Hayakawa Yuho emphasized the need to formulate an appropriate industrial policy to protect and nurture the sector.
“The 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 constantly,” he added.