Mitsubishi plans big for Bangladesh
Global automobile giant Mitsubishi Motors has made a bid to increase its market share in Bangladesh, which it believes has big potential to grow as an emerging market for cars.
This is part of the Japanese carmaker’s new business plan. According to media reports, Mitsubishi said it would target a 37 percent jump in sales of Mitsubishi-brand vehicles to 1.37 million vehicles worldwide by 2013/14. Mitsubishi now looks to emerging markets for its rapid expansion.
The announcement came when Mitsubishi’s net loss narrowed in the nine months to December from a year earlier as the global market recovers and cost-cutting measures helped offset the yen’s strength.
Global retail sales volume for the three quarters totalled 807,000 vehicles, up 17 percent from the same period in 2009.
In Bangladesh, Mitsubishi will start assembling sedan cars. The 1,300cc sedan cars will be the latest addition to the current Mitsubishi Pajero and Mitsubishi Pajero Sport projects in Bangladesh. State-owned Progoti Industries Ltd has been assembling Pajero vehicles since 1985.
Osamu Masuko, global president of Mitsubishi Motors, who is in the city on a three-day visit, shared his company’s expansion plan for Bangladesh with The Daily Star in an interview yesterday.
The Bangladesh government and Mitsubishi have agreed to study the possibility of the sedan-assembling project. The feasibility study will take six months to complete. Masuko said prices of the cars will decrease after local assembly but did not disclose further details on it.
The automaker will gradually transfer technology to Bangladesh to help it go into car-manufacturing in future. “Bangladesh must localise components to save foreign currency being spent on imports,” said Masuko.
Presently, Bangladesh’s annual car market is around 30,000 units, dominated by reconditioned Japanese cars.
Rangs Motors, the market leader in the branded car segment and sole distributor of Mitsubishi vehicles, has a 38.6 percent share of the new-car market.
“It is an easy target to sell 200,000 units a year in the next five to 10 years,” Masuko said considering the country’s population size and growing economy.
He believes the middleclass will get cars when more parts will be produced locally. Reduction of import duties is the present remedy, he added.
He cited the example of Korea-based Hyundai Motor that became a global player due to transfer of technology by Mitsubishi.
“It took 39 years to transfer the technology to Hyundai. If we start here today it will take at least 10-15 years to do that,” said Masuko.
Mitsubishi and Rangs have also announced the plan at a press conference at Sonargaon Hotel yesterday.
Yukio Okamoto, statutory auditor of Mitsubishi Motors, and Romo Rouf Chowdhury, managing director of Rangs Ltd, were present at the press conference.
Despite being a potential country for car-making, Chowdhury said manufacturing is not taking place largely due to an unfavourable tax structure. “The tax rate is the same for imported and manufactured vehicles,” he said.