Locally manufactured tyres now meet 70% of market demand
Locally produced tyres used in bicycle, rickshaw, van, light trucks, minibuses, microbuses, motorcycles, auto rickshaws and easy bikes are now meeting the lion's share of the market demand.
But the situation was not like this a decade ago, when imported products would dominate the local market, with hardly any local company worth the name operating here at that time.
To bring about a change in the situation, Gazi Tyre, a concern of Gazi Group, took up the challenge becoming the first local company to manufacture large tyres for the rapidly growing transport sector.
“Locally manufactured tyres now meet 70% demand in the rickshaw, van, bicycle and light automotive segment. Gazi tyre is in the leading position in the local market,” Tarun C Rajbongshi, head of marketing and sales of Gazi tyres, has told Dhaka Tribune.
They initiated manufacturing tyres for big buses and trucks locally and are now planning to export by 2021.
At present, six local companies are producing tyres of light automotive, rickshaw, and bicycle tyre, taking advantage of a surging market that used to be fully dominated by importers a decade ago.
Of the companies, Gazi Group manufactures Gazi Tyre, Apex Husain Group Husain Tyre, Meghna Group MTF Tyre, Suntec Tyre Ltd Polo Tyre, Rupsha Tyres & Chemicals Ltd Rupsha Tyres and RFL Autos manufactures Decent Tyre and Duranta Tyre.
They manufacture tyres for light trucks, minibus, microbus, motorcycle, auto rickshaw, easy bike and bicycle.
Jamuna Group and Hasan Trading Company are planning to step into the market to manufacture tyres for the local market. Jamuna aims to make tyre for big bus-truck and passenger vehicle, according to industry people.
Now the market of locally manufactured tyres is about Tk1,200 crore. Including the imported products, the market expands to about Tk3,000crore, according to market players.
According to industry insiders, there is a demand for 8 lakh 40 thousand tyres in a year in the commercial vehicle tyre segment (human hauler, mini-bus, pickup vans and small trucks). The local brands meet around 70% of the demand.
The yearly demand for three-wheeler tyre has increased to 11 lakh pieces at present. Local companies meet around 80% of the demand.
The yearly demand for two-wheeler tyre stands at 12 lakh pieces. Local companies meet around 60% of the demand.
Apex Husain Group started production in 1996 with tyres of three-wheeler scooter. They now manufacture tyres for light trucks, minibus, microbus and motorcycles.
Talking to Dhaka Tribune, Md Kamal Abdus Saad, GM and head of sales and marketing (tyre) of Apex Husain, says: “In the past, India and China dominated the easy bike tyre segment but now we are leading in this segment.”
‘We will need more time to dominate the big bus-truck and passenger vehicle tyre market. Government cooperation is also needed in this regard,” he states.
“Currently, our costs are increasing due to gas prices hike. As a result, the price of local brand tyre has increased by 5%, which rendered it tough to compete with the imported brands," he adds.
Now there is an annual demand for 15 lakh pieces of easy bike tyre. Local brands meet around 90% of the demand.
There is an annual demand for 55 lakh pieces of tyre in the rickshaw and van tyre segment and the local companies meet around 99% of the demand.
Local brands meet around 99% of the yearly demand for 18 lakh pieces of tyre in the bicycle tyre segment.
But the scene is different when it comes to the tyres of truck, bus, jeep and other passenger vehicles. Around 99% of the demand for 4 lack 80 thousand pieces of tyre is met with imported brands.
Despite high demand for large bus-truck and passengers’ vehicle tyre, the local companies are yet to make an entry into the sector as it requires large capital investments, according to local industry insiders.
“The market of tyres of truck, bus, jeep and other passenger vehicles is still dominated by imported brands. The local brands have hardly any share in this segment,” says Tarun C Rajbongshi.
He informs that there are two types of tyres in terms of manufacturing: bias and radial. "Companies in our country use bias plant to reduce costs. It is not possible to make large truck-bus tyre with bias plant," he says.
He, however, adds that radial tyre is getting popular thanks to its longevity compared to bias tyres.
Rupsha Tyres & Chemicals Ltd, which has been manufacturing rickshaw and bicycle tyres since 1991, sells at least 50 thousand pieces of tyres in a month.
Talking to Dhaka Tribune, its director Miraj Rahman said that several years ago, the Bangladeshi rickshaw and bicycle tyre market was totally dominated by Chinese and Indian tyres.
By manufacturing quality bicycle tyre, Rupsha played a significant role in establishing Bangladeshi brand in the local market, he said, adding that the sale of tyres grew by 10% every year.
RFL Autos came to the tyre market only four years ago. The company is making tyres for rickshaw and bicycle.
RFL Autos Deputy Brand Manager (Decent tyre and other products) KM Auvik Jamil said: “At present, we are manufacturing tyres for rickshaw and bicycle. But soon we will bring easy bike tyre and other light automotive tyre in the market."
According to Bangladesh Road Transport Authority, 4,68,706 motorized vehicles were registered in countrywide in the fiscal 2017-18 year. At the end of June, 2018, the total number of registered motorized vehicles in the country stood at 37,13889. It was 1,75,000 in 1987.