Companies accelerate higher cc bike manufacturing plan 

The government on Sunday published the gazette of its Import Policy Order 2021-24, allowing local plants to import parts and raw materials for up to 500 cc motorcycles.

Companies like Ifad Motors and Asian Motorbikes which are set to manufacture Royal Enfield and Kawasaki big bikes respectively in their local plants are now accelerating their plans so that their models hit the road sooner.

"Now our target is to manufacture the first Royal Enfield by the end of this year," said Taskeen Ahmed, a director of Ifad Group. 

Thanking the government for the needed change in policy, he said, "People will get a better riding experience and safety with the higher cc modern bikes."

He expects the leap forward would attract over Tk1,000 crore in fresh investments in the motorcycle industry.

In terms of vendor development in the two-wheeler backward linkage industry, the change is going to unlock huge potentials, he said, adding, "Export potential of motorcycle components would rise as the global market usually use 200-700cc bikes and the local components having demand both home and abroad would attract investments in backward linkage."

His company is preparing itself to manufacture 350 ccs or even stronger motorcycles of the iconic Royal Enfield brand in its planned, over Tk100 crore, plant at the Bangabandhu Sheikh Mujib Shilpa Nagar in Chattogram.

Asian Motorbikes, the local partner of Japanese Kawasaki, was waiting for the import policy order gazette and having the right policy following the Industries ministry approval for the local manufacturing plant it is accelerating its investment plan.

"We will fly to Japan soon for meetings with our principal Kawasaki," said Safat Ishtiaq, head of operations of Asian Motorbikes.

With an estimated investment plan of around Tk150 crore to begin manufacturing at the local Kawasaki motorcycle factory his company aims to make the first 250 cc Kawasaki bike by the end of next year and it has plans to gradually add bigger models.

DHS Motorbikes, the new local partner of Italian brand Benelli, is also planning to locally manufacture higher cc bikes, said its Executive Director Mostafizur Rashid Bhuiyan Parvez.

Motorcycle Manufacturers and Exporters Association of Bangladesh President Hafizur Rahman Khan appreciates the policy change as it would bring a real change in capacity development for exports, creating a strong backward linkage.

Without a local market experience for high cc bikes, it proved tough for his company Runner Automobiles to thrive in export markets.

Runner, as the first company in the country, began exporting motorcycles a few years back and the government used to allow the company to manufacture over 165 cc bikes only for exports.

Runner would introduce stronger and safer over 165 cc motorcycles both under its brand and some other world-class brands it is selling now – Vespa, Aprilia, KTM, UM.

Hafizur Rahman Khan, however, is disappointed with the continuation of some sort of restrictive policy for his industry, which he feels is "not necessary at all".

Maybe, no company would plan for manufacturing over 500 cc bikes immediately, but still, the remaining 500 cc barrier will continue to hurt international investors' confidence.

"No restrictions at all alongside incentives would lead to a significant investment inflow in the industry and accelerate the technological know-how and manufacturing ecosystem," he said.

Rancon Motorbikes, the manufacturer of Suzuki motorcycles in the country, is also planning to extend its manufacturing lines for bigger bikes, subject to the outcome of the discussion with its Japanese principal, according to its Head of Sales AKM Tauhidur Rahman.

But the company is confused due to the lack of clear announcement regarding the local market sales and registration of the upcoming big bikes.

The other three said the import policy order and manufacturing approval together implies local market sales and registration by default.

The import policy order restricted the import of completely built units of over 165 cc motorcycles unless it is for the use of law enforcement agencies.

The local market

The motorcycle Industry Development Policy five years back that incentivised local manufacturing was a big shot in the local market's arm as annual sales nearly tripled in five years to around 6 lakh units.

With the increasing purchasing power of the people and massive development in road infrastructure and most importantly the adoption of the right perception that stronger bikes are safer than smaller ones on roads, the market for higher cc motorcycles is rising faster.

Asian Motorbikes' Safat Ishtiaq said, right now, over 4000 premium 150 cc bikes are being sold in the country each month with price tags around Tk5 lakh.

He anticipates 70-80% of the imported bikes, subject to over 150% tax and duties in total, would be replaced by superior ones locally made at similar price tags as local manufacturing would bring down the duty burden to less than half.

And the market for both the small commuters and strong new bikes would only grow in coming years, he hopes.