The current protests in Bangladesh come as a shock to the two-wheeler industry in the country, where Indian players like Bajaj Auto, Hero Motocorp, and TVS Motorcycle jointly hold more than 50 per cent of the market share. According to industry sources, the Bangladesh two-wheeler market is expected to dip to around 380,000-400,000 units, with a decline of around 15-20 per cent compared to last year.
Though this may be a small portion of the sales of the Indian majors globally, the current crisis may impact their export numbers during the current financial year. This comes after 2023 saw Bangladesh’s two-wheeler sales dip to a five-year low of 461,805 units. “Everything is shut in that country. This will have a serious dent on the sales operations and functioning of our Completely Knocked Down (CKD) units in that country. Sales are expected to go below 400,000 units this year,” said a source aware of the development.
There is hardly any demand in the country since the protests broke out in June against a Supreme Court order reinstating a 30 per cent quota for descendants of freedom fighters in jobs. Two-wheeler sales in the country were already declining due to the economic slowdown, inflationary pressure, and higher import duty on two-wheelers, which resulted in a higher price regime. According to a report by The Daily Star quoting Uttara Motors, the only distributor and manufacturer of Bajaj Auto in Bangladesh, the company had around 28 per cent market share in 2023 with 127,928 units compared to 217,180 units in 2022.
An industry source said that Hero’s share is around 17 per cent, and that of TVS Motor around 10 per cent. “We are facing a bit of a challenge in Bangladesh. It is small in terms of overall volume. We believe that in a couple of months things will settle down. These are strong markets for TVS,” said K N Radhakrishnan, chief executive officer of TVS Motor, addressing an analyst call. TVS Auto Bangladesh reportedly sold around 60,596 units last year.
On the other hand, for Hero, Bangladesh contributes to around 10-20 per cent of its sales outside India. One of the major reasons for the higher price regime for motorcycles in the country is an import duty of 45 per cent. Rising inflation, along with this, has had an impact on sales. According to the Bangladesh Bureau of Statistics (BBS), Bangladesh’s inflation rate was 9.72 per cent in June this year and 9.90 per cent in May. In addition to this, the protests centring around the anti-quota movement killed more than 440 people in three weeks. Indian companies also hold a considerable share of the car, bus, and three-wheeler markets in Bangladesh.
First Published: Aug 08 2024 | 5:54 PM IST
