According to a recent study, the car market in Bangladesh has the potential to grow ten times larger if local factories expand production.
The market is relatively small due to high import tariffs and car taxes, making them prohibitively expensive for most people. However, local production could change this and lower prices to be more affordable.
Current State Of The Car Market In Bangladesh
The car market in Bangladesh is dominated by used cars imported from Japan, with relatively few new cars available. This is due to high import tariffs and taxes on new cars, which can add up to 300% of the car’s value. As a result, only a small percentage of the population can afford a car, with most people relying on public transport or motorbikes.
Advantages Of Local Production
Local car production could significantly reduce prices, making them more accessible to the general population. In addition, it could create jobs and stimulate economic growth in the country.
By producing cars locally, manufacturers could also customize them to suit better the needs of Bangladeshi consumers, such as adding features like air conditioning or better fuel efficiency.
Challenges To Expanding Local Production
However, there are several challenges to expanding the local production of cars in Bangladesh. Firstly, there needs to be more skilled labor and infrastructure, which would need to be developed to support the local car industry.
Additionally, high start-up costs are involved in setting up a car manufacturing plant, which could be a barrier for potential investors.
Government Support For Local Car Production
The government of Bangladesh has recognized the potential benefits of local car production and has taken steps to support the industry. In 2018, the government reduced import duties on car parts and components to encourage local production.
Additionally, it has offered incentives to foreign companies to set up car manufacturing plants in the country, such as tax breaks and land subsidies.
Future Prospects For The Car Market In Bangladesh
The prospects for the car market in Bangladesh look promising, with the potential for significant growth if local production expands. In addition, the government’s support for the industry could attract more foreign investment and stimulate economic growth.
However, several challenges remain to be overcome, including the need for infrastructure development and the availability of skilled labor. Nonetheless, if these obstacles can be addressed, the car market in Bangladesh could experience significant growth in the coming years.
Conclusion
The potential for local factories to expand the car market in Bangladesh is significant. With the right government support and infrastructure development, local production could bring down prices and create jobs while stimulating economic growth in the country.
Although there are several challenges to be overcome, the prospects for the car market in Bangladesh look promising.
