Bangladesh

Last modification: 26 Apr 19
Introduction: 

The Republic of Bangladesh is a country in South Asia, its borders India and Myanmar. It is considered to be a middle power and a major developing nation. Within South Asia, it ranks first in gender equality, second in foreign exchange earnings and third in life expectancy and peacefullness.

Chapter 1: Economic and business environment

Demographics

160,995,640
Capital

Dhaka
Major cities

Chittagong, Khulna, Rasjhahi
Languages

Bengali (bn-BD), English (en)
Bengali is the sole official language, but English is sometimes used secondarily for official purposes and the legal system. The middle and upper classes also use English as a second language and widely used in higher education.
GDP

1,211.70 USD (2015)
Unemployment rate

4,9% in 2016
Main industries

GDP Composition by Sector:
Agriculture (++ percent)
Industry (+ percent)
Services (- percent)

Industrial Production Growth Rate: 6.5 percent

Industries: clothing, food, leather, ship building

Transport is also a major sector in the economy. 
Currency

BDT Bangladeshi taka
Interest rate

3.00% - 9.25%
Political key info

Bangladesh is a unitary, Westminster-style parliamentary republic with universal suffrage.
Inflation

5,4% in 2017

Chapter 2 : Automotive market, segments & sales

Total Car park

3 cars per 1,000 inhabitants
2016: the Bangladesh Road Transport Authority (BRTA) counted 0,42 million registered vehicles.
First half of 2018: 282,354 units of commercial and passengers cars were registered.

As Bangladesh has achieved considerable economic growth (> +7% GDP), with stable unemployment and growing foreign investment, purchasing power has risen and has caused an increased demand for vehicles (cars, motorbikes, LCVs). To meet these demands, Bangladesh must import vehicles, as none are manufactured in the country.
 
New vehicle registrations (Cars, LCV, Trucks)

  • New cars registered with Bangladesh Road Transport Authority (BRTA)
    21,062 units in 2015
    20,304 units in 2016
    21,959 units in 2017
    18,227 units in 2018

    80% of the cars are imported from Japan
    Increasing demand of Luxury Commercial Automobiles like Volvo, BMW, Scania, Hyundai and Mercedes-Benz.

    New SUVs registered with the BRTA:
    5,425 units in 2017
    5,555 units in 2018

    New trucks registered with the BRTA: 
    8,136 units in 2014
    6,330 units in 2015
    7,275 units in 2016
    10,353 units in 2017
    7,808 units in the first 7 months of 2018

    New buses registered with the BRTA:
    3,760 units in 2017
    1,980 units in the first 7 months of 2018
Top 5 brands (total market)

Nitol has 40 percent market share,

Ifad Auto holds 38 percent, and

Runner Motors 10 percent

(according to the IDLC review)
Model preference top 5 (total market)

Arion 
Premio 
Azxo
Hiace for one box 
Noah forfamily car
Boxy, and Harrier and Pradalion  for SUV

Chapter 4: Taxation & legislation

Tariffs are progressively levied on emissions, with a minimum rate of approximately 155% and a maximum rate of 600%. A change in import tax was announced on June 2, 2017, depending on the vehicle type, but the import tax increased from $ .1000 to $ 10000 compared to before the change

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Chapter 5: Car policies

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Chapter 6: Funding methods

Overview of penetration of funding methods (buy or lease statement)  
Type of suppliers (captive versus multibrand, international versus local…) Car rental companies (like Europcar, Sixt or Hertz) offer rental cars, a lease or replacement cars of vans.
 
6.1 Outright purchase:  
Definition Vehicle is registered as a fixed tangible asset on the balance sheet at the acquisistion value and depreciated over total useful economic life
Pro’s and con’s  
Economic & legal ownership Full ownership, included Risks asd Rewards
Business practices  
6.2 Renting (Finance lease) :  
Definition  
Pro’s and con’s  
Economic & legal ownership  
Business practices  
6.3 Full service leasing (operational leasing)  
Definition  
Pro’s and con’s  
Economic & legal ownership  
Business practices  
6.4 Fleet Management  
Definition  
Pro’s and con’s  
Economic & legal ownership  
Business practices  
6.5 Short term rental  
Definition  
Pro’s and con’s  
Economic & legal ownership  
Business practices  
6.6 Other funding methods  
   
   
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Chapter 7: Fuel

Fuel Type Segmentation

CNG, Petrol, Diesel
 

Fuel price evolution

Fuel prices can be very volatile.

In 2012, the gas price was $1.15/l, and the diesel price was $0.75/l.

petrol in $/l.

2010    1.09

2012    1.15    

2014    1.30    

2016    1.12

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Chapter 8 : TCO components

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Chapter 9: Safety, insurance and telematics

Accidents in 2018

Deaths: 7,393
Serious injuries: 1,722
Mild injuries: 14,471

Traffic & road conditions
Traffic in Bangladesh moves on the left. Roads are extremely crowded, particularly in the cities, with bicycles, rickshaws, three-wheeled mini-taxis (CNGs), cars, overloaded buses, and trucks all vying for road space and right of way. Drivers are often unlicensed, aggressive, risk-taking, and poorly trained. Many vehicles, particularly large trucks and buses, are badly maintained and driven by inexperienced young men recently arrived from rural Bangladesh seeking quick employment. (Source: http://www.countryreports.org/travel/Bangladesh/traffic.htm)

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Chapter 10: Environment

  • Vehicles are the main reason of air pollution in Dhaka City. Mainly vehicles run on diesel.
  • Low environmental awareness
  • No EV charging station yet

    The arrival of hybrid cars, mostly used ones, shot up by 10 times to 1,846 units in fiscal 2017-18 from a year earlier, according to data from the National Board of Revenue.

    FY 2016: 24
    FY 2017: 183

 

 

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Chapter 11: Mobility

Traffic conditions

In the past 10 years, the average traffic speed in Dhaka fell from 21 km/h to 7 km/h, and by 2035 the speed may drop to 4 km/h.

According to the 2016 revised Strategic Transport Plan (RSTP), Dhaka residents travel about 30 million times daily. Of these trips, 47% are operated by buses, 32% by rickshaws and 9% by private cars that occupy 76% of the roads. Public transportation uses 7% of the roads.

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Chapter 12: Key trends to watch

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