UAE-based Bangladeshi auto industry traders plan to invest in homeland

UAE-based Bangladeshi auto parts traders and automobile service providers are planning to set up several parts manufacturing plants in Bangladesh's fast-growing $4.42 billion automotive markets.

"We are ready to invest in Bangladesh to support the industry's growth," said Mohin Uddin, a leading member of the Bangladeshi auto parts traders in the UAE, at a recent meeting with the leaders of Bangladesh Automobiles Assemblers and Manufacturers Association (BAAMA).

"We have experienced and skilled human resources, capital and the know-how," added Mohin, also chairman of the Dubai Royal Group.

At the meeting held on the sideline of Dubai Expo 2020, the UAE-based Bangladeshi auto traders also said, they are in a unique position to market Made in Bangladesh auto parts in the UAE market that will help the Bangladeshi parts manufacturers expand in the Gulf Cooperation Council (GCC) markets.

Over 5,000 Bangladeshi traders dominate the UAE's automotive aftermarket sector, especially the used auto spare parts market.

They are involved in the imports, wholesale, retail, servicing and re-export of the auto parts sector while a large number of them also own auto electric service centres, garages that take care of all types of auto servicing and repairs.

These businesses employ more than 50,000 skilled and semi-skilled professionals who have the complete know-how of maintenance, repair, knock-down, overhaul and re-assembly of various models and brands of automobiles.

The annual automobile market in Bangladesh is around $2.35 billion while the annual parts and components market is estimated to be more than $2.05 billion, according to a research report.

More than 4.7 million vehicles are currently registered in Bangladesh of which more than 60% are Japanese brands while Indian brands represent 25%, according to an industry report.

Of the 4.7 million registered vehicles, 66% are two-wheelers that have been growing at a compound annual growth rate (CAGR) of 15% over the last five years.

Bangladeshi automobile assemblers and manufacturers import 35% of the parts from China and 30% from India, the report shows.

"The Bangladesh government is keen to develop the automobile industry," said Mohammad Sirazul Islam, executive chairman of the Bangladesh Investment Development Authority (Bida), which organised a seminar at the expo to invite UAE businesses to invest in Bangladesh's automotive industry, where the manufacturing and assembly plants rely mostly on imported auto parts.

"It will need massive investment to acquire technology, know-how and produce components to support the automobile manufacturing plants," he added.

Abdul Matlub Ahmad, president of the BAAMA, said, "The automobile industry is going to be the next big contributor to Bangladesh's economy if we can attract foreign investment in the automobile component and parts industry, which we currently import for our manufacturing plants.

"The industry is currently catering to the domestic market. However, if we could develop the industry properly, Bangladesh could become a major automobile exporter to the rest of the world – the same way we developed the ready-made garments industry," he added.

"Currently we are scouting for investment in the auto parts industry, that could produce vital auto parts to support the local auto assemblers and manufacturers so that we don't have to import them from other countries," concluded Abdul Matlub Ahmad, who is also the president of the India-Bangladesh Chamber of Commerce and Industry (IBCCI).