Uncertainty over pickup van assembly at Pragati Industries

Work on the project to assemble double cabin pickup vans at the state-owned company Pragati Industries Ltd (PIL) has halted due to the Covid-19 pandemic.

As per an agreement with the Japanese company Mitsubishi, Pragati started assembling the pickup vans on a trial basis in November last year. Since then, it has assembled 12 cars in two phases.

It bought parts to assemble 20 more vans from March to April this year – in the third phase of trial, which should have enabled it to get final approval from Mitsubishi to begin commercial production.

However, the third phase was halted when the Japanese engineers returned to their country due to the novel coronavirus pandemic.

Deputy-Chief Engineer of the PIL Kaikobad Al Mamun told The Business Standard that, "The work assembling Mitsubishi L-200 model pickup vans was halted when the Japanese engineers and technicians left due to the novel coronavirus crisis. They will return when the coronavirus situation improves in Japan."

"We will need one more month to resume our work even after they return. However, we are not sure when we will be able to go into commercial production after completing the final trial," he added.

According to the agreement with Mitsubishi, Pragati Industries is supposed to assemble 1,200 pick vans from April this year to April 2021.

Also, a team of engineers from Mitsubishi started training the engineers at Pragati Industries to assemble the pickup vans on November 11, 2019.

Pragati Industries officials hope that the price of each L-200 pickup van assembled by them will be less than Tk40 lakh, while the current market price of the van is Tk48 lakh.

The process to assemble pickup vans worth Tk480 crore, at Pragati Industries, has stalled.

Sources at Pragati Industries said halting the process has caused the company a loss of Tk25 crore. To overcome this loss, the state-owned company has sought incentives from the government, said sources at Pragati Industries.

The state-owned company earned Tk733.81 crore by selling cars in the last fiscal year. After depositing Tk432 crore in the government treasury, the company made a net profit of Tk101.4 crore.

Pragati Industries sources said there is huge demand for cars on government projects. Most of these cars are bought from different sources by announcing tenders.

Although Prime Minister Sheikh Hasina asked the authorities concerned to prioritise Pragati, an insignificant amount of these cars are supplied by the company.

However, the company will be able to supply a significant number of cars needed in the country after it starts assembling the pickup vans, said Pragati Industries.