Honda introduces locally-made 160cc motorbike at bargain price
A two-wheeler manufacturer - if its frame is welded locally - has to pay a total effective tax and duties not exceeding 60 percent
Bangladesh Honda Private Ltd has introduced the first ever locally manufactured 160cc motorcycle Honda Xblade at a lower-than-expected price tag of Tk1,72,900.
Himihiko Katsuki, the managing director and chief executive officer of Bangladesh Honda, unveiled the new model in front of motorcycle enthusiasts on Friday evening at the International Convention City Bashundhara in Dhaka.
The two-day mega event became a festival for Honda lovers as people at the venue became busy with test rides and stunts, with rock concerts as a backdrop.
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"Xblade, which first came to the Indian market in 2018, was a widely anticipated model in Bangladesh because of the combination of power, fuel efficiency, riding balance, control and comfort, and most notably for its eye-catching sharp design with robo-faced LED headlamp," said Gias Uddin Sajeeb, a Bangladesh Honda official for marketing and promotions.
According to the Honda manual, Xblade comes with a strong echo technology engine that is capable of producing a maximum power of above 14 BHP and a maximum torque of near 14 NM.
Gias said the Xblade, dubbed as a "Street All-rounder," is a fuel-efficient motorcycle despite a high-powered engine and a 130 mm wide rear-tyre for better road grip.
Bangladesh Honda manufactured Xblade with the front-only disk braking option and will gradually add the more advanced braking systems in its lineup.
Unbelievably lower price
After long speculation, Bangladesh Honda Private Ltd on December 5 declared that their next model Honda Xblade 160 is going to be a locally manufactured, and the price will be set at Tk1,72,900.
This became a shock to third-party importers and early adopters who already bought Xblades from them.
Under current policy in Bangladesh, a two-wheeler manufacturer - if its frame is welded locally - has to pay a total effective tax and duties not exceeding 60 percent. The manufacturers mainly have to pay duties on imported parts and save a lot from reduced taxes.
A complete knocked down (CKD) unit is subjected to an effective tax above 110 percent. However, if a company submits a plan to weld frames locally soon, the effective tax and duty drops at around 90 percent for models which are imported in parts and not as one assembled unit.
And for two wheelers imported as completely built units (CBU) the government charges a total tax of over 150 percent on import value.
Until Bangladesh Honda's official announcement this month, a number of curb market importers had been importing the Xblade Antilock Braking System version from India and selling them above Tk3 lakh.
The Xblade pricing has also brought an industrywide drag on price tags.
The ACI Motors Ltd, Bangladeshi partner of another Japanese premium motorcycle brand Yamaha, lowered the prices for their wide-tyre 150cc CBU models. But these are still priced way higher, as Yamaha is lagging behind in terms of reducing tax burden through localisation.
"As the world's number one motorcycle manufacturer, we are providing the right products at a right price, and we are ahead of the competitors," said Gias Uddin while talking to The Business Standard.
Honda in Bangladesh
Imported Honda motorcycles have been available in Bangladesh since 1960s.
Atlas Bangladesh, a state-owned company, was selling Honda's CKD units in the country until they lost the business with Indian Hero Honda following a split of the two brands in India.
In 1999, Japan's Honda Motor Company opened its own subsidiary named Honda Motorcycle and Scooter India Private Ltd.
In 2012, the company formed a joint venture with the government of Bangladesh. Now Honda Group (Japan's Honda Motor Company and its Thai subsidiary Asian Honda Motor Company Ltd) owns 70 percent and Bangladesh Steel and Engineering Corporation owns the remaining 30 percent shares of Bangladesh Honda Private Ltd.
The company started assembling Honda motorcycles in a rented factory at Gazipur in 2013. In January 2018, it opened its 25-acre manufacturing and assembly plant at Abdul Monem Economic Zone in Munshiganj.
The company is capable of manufacturing one lakh motorcycles annually and has a plan to increase production five-hold within the next five years, corresponding with increased sales. So far, the company has invested Tk360 crore.
Year of maximum localisation
Apparently, 2019 is the year for localisation of Honda motorcycles in Bangladesh.
This year the company has come up with four models manufactured at its Munshiganj plant.
In January this year, Honda's frame welding in Bangladesh began with 110cc segment – Dream Neo and the newer model Livo. In July, the company unveiled another localised model CB Shine SP in 125cc commuter segment.
Until this month, customers were deprived of any locally manufactured motorcycles in their beloved segment of 150-165cc with wider tyres. And Honda came up with the Xblade to cater to the need for these, at a low price.
And the market seems to have fallen in love with the phenomenon as sales for locally welded bikes that cost customers less are increasing. The company sold over 50,000 bikes in 2019, much higher than in 2018.
"We are expecting increased sale to continue for Honda Motorcycles and the Xblade is going to be another game-changer after CB Hornet 160," said Gias Uddin.
Launching two years back, Honda has sold around 27,000 CKD units of its 163cc power bike CB Hornet.
