Local production reaches 200,000 units
From a humble beginning from a rented factory, to an exclusive plot inside an economic zone, Bangladesh Honda (BHL) has come a long way.
As a subsidiary of the Japanese namesake, it celebrated the occasion of producing and selling 200,000 motorbike units in the country with the launching of a new Honda Dream 110cc yesterday.
BHL officials also said that the new Dream 110cc will be its most affordable model in the country, with its price set at Tk 89,900.
They claimed it will be beneficial and efficient for those interested in ride sharing, as well as small traders and employees with low income.
The launching ceremony was held inside BHL's factory located inside the Abdul Monem Economic Zone at Char Baushia of Gajaria upazila in Munshiganj.
Honda is touching its 30 million production milestone by manufacturing motorbike, automobile and power equipment globally, said Himihiko Katsuki, managing director and CEO of BHL.
Katsuki also said that the cumulative 200,000 units production represents a significant milestone for Honda's motorcycle operations in Bangladesh.
The BHL CEO also said that Honda's aim is to contribute to society by providing everyday mobility at a reasonable price and develop industrialisation in Bangladesh. This is why they were able to reach 200,000 units in a short period of time.
They began assembling complete knockdown (CKD) motorcycles at a rented factory in Gazipur in 2013 with Honda CD80 as the first produced model.
Production in first year was 66 units which was sold at three Honda dealerships.
BHL inaugurated its own manufacturing factory in 2018 in Munshiganj at the Abdul Monem EZ, with approximately 49,000 motorcycles produced in the first year. Their cumulative motorcycle production achieved 100,000 units in January 2019 and 150,000 units in November the same year.
Current produced models, apart from the new Dream 110, include Livo, CB Shine SP, XBlade, and CB Hornet 160R.
BHL's invested capital is Tk 360 crore, while Honda Group (Honda Motor and Asian Honda Motor) owns 70 per cent of its stakes, and Bangladesh Steel and Engineering Corporation, under the industries ministry, owns the remaining 30 per cent.
As of November 2020, 575 associates are working with BHL regarding import, production, and sales of motorcycles and parts.
Naresh Kumar Rattan, senior vice president of BHL, said that the Covid-19 pandemic did affect their business, but the motorcycle market is ripe for expansion.
Instilling customer trust by branding Honda motorbikes as a safe mode of transport will be the key, he also said.
"The 100-110cc segment of customers consist of mainly first time users like small traders, medical and sales representatives, farmers, NGO workers, teachers and ride sharing bikers. We came up our Dream model concept accordingly," Rattan said.
As part of Honda's localisation of business in Bangladesh, the BHL senior VP said that initially, as an importer cum manufacturer of a motorbike, or a complete build unit (CBU), they had to pay 149 per cent in duty and taxes, which applied on retail prices accordingly.
After producing at their CKD factory by just importing the spare parts, but manufacturing locally, they had to pay 88 per cent of the taxes.
But after settling at the economic zone, the government's localisation system policy for production enables them to pay 49 and 57 per cent in two categories, Rattan added.