Uttara Motors Ltd is going to invest $33.63 million (Tk285 crore) to build a local plant to assemble and manufacture Suzuki cars in Bangladesh, according to the Bangladesh Economic Zones Authority (Beza).
The leading automobile group of the country signed an agreement with Beza on Wednesday to lease a 50-acre plot at Bangabandhu Sheikh Mujib Shilpa Nagar in Chattogram.
The car plant would generate high-quality employments for 800 people, said Uttara Motors Chairman and Managing Director Matiur Rahman, who signed the agreement on behalf of his company while Beza General Manager Md Moniruzzaman did so on behalf of the government body.
Uttara Motors has been in the business of diversified world-famous automobile brands since the independence of Bangladesh.
Suzuki Motors is a leading Japanese automobile company, which has a global presence with a tremendous track record of manufacturing partnership with local firms.
In India, its joint venture with the government turned out to be a legend as over half of India's sizable car market is served by the company.
However, Bangladesh is a different story for Suzuki as less than 500 of the over 15,000-25,000 imported cars annually sold here are Suzuki vehicles.
Automobile analysts blame the market's love for reconditioned Japanese cars that are preferred as better value for money as car import duties are extremely high in Bangladesh.
The local plant will help expand Suzuki's market in Bangladesh significantly as localisation is expected to bring unit prices down to make cars affordable to the masses, Matiur told The Business Standard.
His company is also assembling Isuzu commercial vehicles and Bajaj three-wheelers in Bangladesh. Bajaj has occupied nearly half of the Bangladesh's two-wheeler market.
Bangabandhu Shilpa Nagar: The automobile hub
Beza is leading a programme to offer investors world-class services and that is why Uttara Motors preferred Bangabandhu shilpa nagar, a planned 30,000-acre industrial city, to expand its manufacturing endeavour, Matiur said at the deal signing ceremony held at the Beza office in the capital.
Paban Chowdhury, Beza executive chairman, said more land is reserved for automobile companies at Bangabandhu shilpa nagar as Beza is working to grab the emerging opportunity to locally manufacture cars, commercial vehicles, and two-wheelers.
Alongside catering to the local market demand, companies can export vehicles and parts to many regional markets.
Matiur expressed his hope that Uttara Motors could soon begin building its factory at the country's first ever potential automobile hub, which has already attracted $336 million investment proposals from automobile companies alone that can create 7,500 jobs.
GPH Group's Star Allied Ventures has already leased 50 acres of land, while local automobile houses like Runner, Ifad, and Auto Imports expressed their interest to build factories there.
Japanese automobile brands like Mitsubishi and Kawasaki also expressed their interest for making investment.
Beza also informed that the first ever electric vehicle plant of the country is going to be built at the industrial park.
The plant will be able to make 35,000 electric cars, 50,000 electric three-wheelers, and one lakh electric two-wheelers annually.