Fahim Adnan Khan is the Head of Corporate Affairs and Project Management at Rancon Motorbikes LTD. We took the liberty of talking with him to get an inside look at the Bangladeshi motorcycle industry and how it is dealing with the COVID-19 situation.
Would you say that purchasing a motorcycle is the best way to obtain a means of private transport?
– It’s one of the best, to say the least. You can walk, buy a bicycle or a car, but factoring in how much distance you can cover and cost-effectiveness, a bike is much more preferable. Compared to a car, it’s much easier and cheaper to maintain and keep.
Do you think the motorcycle market will maintain its cost-effectiveness even in this situation?
– Of course. Considering all the safety precautions for the pandemic, public transport isn’t a viable option and many have to resort to private transport to go from A to B. So it’s important that motorcycles stay affordable in the budget segment at least.
Would you say that there is a prospect for the demand for bikes in the current market despite the situation?
– We already have a good response from the customers, and the demand in the market persists. As such, we are very hopeful for the bike market although there are a lot of challenges at the moment from the company’s perspective.
“…it’ll take a long time for the constant challenges and difficulties to settle down.”
How has the motorcycle industry tackled the current situation?
– The bike industry has been facing challenges since September of 2019. It hasn’t been performing as per our targets and predictions due to new legislation and tax policies. We had started to straighten things out as much as possible, but the pandemic situation has set us back. So, it has been a challenge for us to maintain the industry, but we’re trying our best.
How long would you say it’ll take for the industry to get back on its feet?
– The current situation is very unpredictable, so it’s safe to say that it’ll take a long time for the constant challenges and difficulties to settle down. Not only the motorcycle industry, but the entire automobile industry has incurred a lot of costs. So, it’s hard to say when everything will straighten out again, but it’ll take time for sure.
Is the engine displacement limitation likely to change anytime soon?
– We were hoping that we could increase the current limit of 165cc to maybe 300 or even 350cc in 2020, however, we’ve been set back almost 1-2years due to the coronavirus crisis.
“the 150cc segment are going down in prices and becoming more and more affordable”
How does the limitation affect the Bangladeshi bike market?
– The uplifting of the limit will be pivotal to the market and is a necessary tool to help the market flourish and develop. It will assist us to achieve a better market overall, give us a better range of vehicles and it’ll help our workers and laborers to engage in more skillful tasks, and thus earn more.
– The second perspective to be considered here is for the export market. There are about 4-5 manufacturers in Bangladesh looking to export bikes. However, the demand for 150cc bikes in that market is limited and will be a barrier to us prospering. Due to the absence of the limit and wider roads, highways, and better infrastructure in foreign countries, buyers look for bikes with more facilities that are often availed at the higher displacement segment. As our infrastructure develops, for example, the Padma bridge, Mawa expressway, 6-8 lane highways, so on so forth, the domestic market will also require bikes with higher cc. Ultimately it’s a necessity for the limit to be uplifted to at least 250cc.
Would bikes still be reasonably priced even at the higher cc segment following higher duty and tax brackets?
– Well, there are two ways to go about importing automobiles, CBU and CKD. Two other renowned companies as well as my own are interested in manufacturing, and essentially all brands, especially in the Japanese market come here to maintain low costs. In the motorcycle market, cost-effectiveness is an important factor and a niché and thus we’ll always try to offer affordable bikes. If our government is cooperative and is kind to us, we can hope for reasonable pricing, albeit initially with the uplifting of the limit, it’s expected to be a bit high. However, we can observe that currently the bikes in the 150cc segment are going down in prices and becoming more and more affordable, and that is the conclusion we hope we reach with higher displacement bikes as we move into CKD import and manufacturing.
What is your long term vision for the domestic bike market?
– Our infrastructure is developing and we are getting involved in the export market. The industry certainly has promise, despite the struggles that we face. I see a very bright picture and am truly hopeful for the industry. Light engineering has been declared the best product of 2020 by the honorable Prime Minister and this sector holds a lot of opportunities. But for this to continue stably, the government policies should not change and we need them to be considerate of us and the consumers.
In that regard, what does the industry need most for stable flourishment?
– The industry needs a continuation of the policies that are established so that companies come to us for manufacturing and so that we can ensure a proper market for the consumers. For example, the VAT waiver ran out this year and we have already talked to the authorities for a renewal. With government cooperation throughout our thriving journey, we can create a proper market with incredible promise.