Not just another dealer: Bangla Cars, a homegrown brand, sets its ambition high

Hossain Group of Industries, a Bangladeshi company, has set a high ambition with its plans to add a local name to car brands such as Toyota, Honda, Mitsubishi or Nissan, which are used widely in the country.

Managing Director Md Zakir Hossain says they have already gone a long way in producing four-wheelers under the Bangla Cars brand by importing parts from different countries and assembling them as per their own design and plan.

"We did not want to be just another dealer-distributor of a foreign company. Many companies assemble cars in Bangladesh, but we wanted to produce a new name with our own efforts, with our own design and accountability so that the glory of Made in Bangladesh is added,” said the young entrepreneur.

Hossain Group, the parent of Bangla Cars, has been working for four to five years on the challenges of creating acceptance of a domestic brand of cars. It has so far produced and sold 114 sophisticated sports utility vehicles, or SUVs. “Good news is that 50 percent of the buyers are new users. In other words, they are getting used to having a car, and have put their trust in us,” Zakir said.

A few SUVs are seen in the showroom of Bangla Cars in Tejgaon Industrial Area of Dhaka. Photo: Mahmud Zaman Ovi

Famous brands from developed countries like Japan and those in Europe have already gained wide acceptance in the country. New and cheap technologies are being introduced.

So, how was it possible to establish a brand while depending on imports for almost all the parts?

"We've realised over the last five years that this is a very difficult task, talking to some of the world's leading brands and asking for their advice. Everyone laughed at us and brushed us aside,” said Zakir.

“We have made 114 cars and handed them over to our clients. We want to give the best quality product in the market to the buyers with a local brand name at an affordable price.”

Bangla Cars provides the customers with a five-year warranty and post-sales services. During a recent visit to its showroom in Dhaka's Tejgaon, a seven-seater SUV was seen among other products. Bangla Cars designed the car and made it at the firm’s manufacturing plant in Panchabati, Narayanganj, in association with the Indonesian automobile brand DFSK.

HOW THE JOURNEY BEGAN

Zakir is the eldest son of Ali Hossain, who bought Tejgaon Re-Rolling Mills a few years before the independence of Bangladesh in 1971 and founded Hossain Group. The company has 172 products in various sectors, including chemicals, food processing, engineering, housing and cold storage.

Zakir returned home in 2006 after completing his master’s in investment banking from Boston University in the United States and joined their family business. During his stay in the US for a decade, he worked for two years at an American investment firm, one year at Goldman Sachs and one year in his own business in the US.

He said he had been planning to set up a car-manufacturing company for a long time. He stumbled repeatedly while consulting car manufacturers in countries, including in Europe, Indonesia, Malaysia and China. But now, after acquiring the necessary equipment, his company has the ability to produce cars.

“The journey started five to six years ago. I wondered how cars are manufactured in other countries. Many people do assemble here. I would have become the manager of another foreign company if I had done that. So I decided to do something else for the country. We had to go into manufacturing with less preparation and better after-sales services when other manufacturers have invested hundreds of billions of dollars.”

Bangla Cars imports car parts from China, Indonesia and other countries. For the production, it has collaborated with Dongfeng China, DFSK Indonesia, Isuzu of Japan and Kingstar China.

The company has 150 Bangladeshis in a team of 200 skilled workers in its factory. “None of the people who work in this factory are unskilled manpower. Everyone has a higher degree in engineering and technical education,” Zakir said.

A few SUVs are seen in the showroom of Bangla Cars in Tejgaon Industrial Area of Dhaka. Photo: Mahmud Zaman Ovi

SURVIVAL CHALLENGE

The construction of the production unit of Bangla Cars in Narayanganj is still underway. According to the company, preparations are being made to build 12 types of vehicles including cars, SUVs, sedans, double-cabin pickups, trucks and buses.

How can such a big plan survive in a small market like Bangladesh? Zakir said they will rely on export as well, seeking government support for this to happen.  

"We have already invested billions of takas for market verification, supply contracts with various companies and a team of engineers. If we want to survive now, we have to capture the market of the country as well as the overseas markets.”

"We have calculated that the company can survive if it can market 5,000 cars every year. According to BRTA, 14,000 to 15,000 buses, trucks, minibuses and cars are being added every year. Among them, 4,000 to 5,000 are buses and trucks. We are moving forward with a plan to make a total of 12 types of cars. We need to invest at least Tk 15 billion to set up 12 production lines which we have the capacity to do. We do not want to go to the bank before setting up three to four lines,” Zakir said.

Cars assembled by Bangla Cars also come with modern features to compete with foreign automakers like Toyota, Honda, Mitsubishi and Nissan. Photo: Mahmud Zaman Ovi

Bangla Cars is also launching new cars with more facilities at affordable prices, aside from warranty and after-sales services. The seven-seater SUVs of Bangla Cars cost Tk 2.7 million each. A customer will need to pay a total of Tk 3.2 million for the SUV with facilities “worth tens of millions of takas”, Zakir said. The market value of Toyota cars with the same facilities is between Tk 7 million and Tk 8 million.

Considering the condition of roads in Bangladesh, the chassis are procured from Indonesia, body from China and engines from Japan. “If a sustainable product cannot reach the hands of the buyer, the market cannot be captured by emotion alone. We are moving forward with that in mind.”

ADDED VALUE

Bangla Cars does not have much value to add to its cars now. The company says it is currently adding 2 to 5 percent value.

A few SUVs are seen in the showroom of Bangla Cars in Tejgaon Industrial Area of Dhaka. Photo: Mahmud Zaman Ovi

"Manufacturing cost is a big cost for car companies. We're adding this service for now. There are also some local value additions of 2-5 percent. We'll take it to 6-7 percent. Spark plugs are planned to be produced from the first quarter of next year as ceramic is available in our country. Besides, we have plans to buy tires from the Jamuna Group and glasses from other local companies,” Zakir said.

"We are still at a very early stage. It is the research and development phase. We can't say how far we can go in terms of value addition before the production lines are fully operational.”

The future of hybrid cars, however, is not in a good shape in Bangladesh, he said. “The electric car market is now growing. But these cars will not be suitable on Bangladeshi roads. It can be considered after a few more years. Then we would also go with the electric cars.”

“Hopefully more value can be added in that case.”