Runner opens country's maiden three wheeler manufacturing plant

Runner Automobiles has extended its local manufacturing endeavour to the three wheeler segment through the unveiling of the country's first three wheeler manufacturing plant.

The homegrown company inaugurated the manufacturing of Bajaj branded CNG and LPG run three wheelers at its Bhaluka, Mymensingh plant on Saturday.

The Tk300 crore facility that is starting with an annual manufacturing capacity of 30,000 units is capable of catering to the entire existing local market demand for engine-run three wheelers.

Prime Minister's Private Industry and Investment Adviser Salman F Rahman opened the country's maiden three wheeler plant on Saturday as the chief guest of the ceremony, also attended by three members of the parliament, BIDA executive chairman,

Bajaj Auto President K S Grihapathy and top industry entrepreneurs.

Mumbai-based Bajaj Auto, the global leader in the three wheeler segment, serves over 90% of the Bangladesh market and the runner plant is set for import substitution.

The local plant through chassis and body welding, painting, engine assembling, vehicle assembling, testing will add around 70% value locally, according to Runner.

And it would help the company reduce unit prices for the last mile vehicle.

Uttara Motors, the decades-long distributor of imported Bajaj three wheelers in the country, will sell locally manufactured CNG run units and Runner itself will continue its marketing of LPG-run ones.

Runner's wheeler plant has already created 300 jobs, mostly technical ones and Bajaj as the principal is supporting Runner to adopt technological know-how.

More than a decade ago Runner built its two wheeler manufacturing plant at the same 38-acre complex under different sheds. The maiden two wheeler manufacturing plant is capable of 1 lakh unit production a year in single shift operation.

The suppressed three wheeler market and the potential

Bangladesh has around 5 lakh engine-run three wheelers on road and only 1 lakh is registered.

The authorities allow only a limited number of units to be registered for running inside a district or city which is too insufficient compared to the demand.

The unmet demand across the country is being catered by the illegal unregistered engine run three wheelers and over 24 lakh unregistered battery run auto rickshaws, popularly called easy bikes, across the country.

Runner chairman Hafizur Rahman Khan said in the inauguration event the government is missing Tk4,000 crore in revenue a year due to the grey market trade of the unregistered easy bikes.

Abdul Matlub Ahmad, president of Bangladesh Automobile Assemblers and Manufacturers Association, said it's high time to come out of the policy that encourages so many illegal vehicles on road and three wheeler registration should be open.

Salman F Rahman said the dependence on unregistered vehicles is unacceptable and he would take steps to set things in the right direction.

Bajaj president said Bangladesh is its second largest export market for two wheelers and three wheelers combined, and its first three wheeler plant outside India is here because of the growth potential.

Runner plant is capable of manufacturing Bajaj cargo three wheelers and also the chassis and body of electric ones in coming days without much changes.

Runner also has the option to opt in for double production shifts if market demand increases.

Annual demand for CNG and LPG three wheelers ranges between Tk15-35 thousand mostly depending on batch replacement of the expired vehicles in big cities.

Since the pandemic, the demand has been subdued and yet to cross 20000 units, said three wheeler marketers blaming the sharp price hike due to the soaring dollar in 2022.

The price impact of local manufacturing

Runner chairman said his company would apply for the offered tax and duty benefits as the maiden plant has been launched.

Gradually Runner would increase the level of localisation of production through procurement of more local parts and it should help reduce duty and tax burden on unit costs, he added.

Runner was yet to announce the price of its locally manufactured three wheelers.

Right now the price benefit would be less and having availed the duty benefits it would come down, he said in a press briefing.

Sources, however, said local units might hit the market with a price tag Tk18,000-20,000 less than the imported units.

Imported completely, the built units of CNG or LPG three wheelers are subject to nearly 90% taxes and duties in total, which can be halved depending on the level of local value edition.

The imported LPG and CNG-run three wheelers are currently selling at Tk5.5 lakh.