‘Policy gaps weigh on auto industry’

Despite its potential to accelerate economic growth, Bangladesh's automobile sector remains constrained by the absence of a conducive national policy, keeping logistics costs among the highest in the world.

"As Bangladesh aspires to become an upper-middle-income country and is set to graduate from Least Developed Country (LDC), a robust automobile industry policy is no longer optional. It is urgent," said M Masrur Reaz, chairman and CEO of Policy Exchange Bangladesh (PEB), a private sector economic and investment advisory platform, at a discussion on conducive automobile policies for green growth and a competitive economy.

The discussion was organised by the Economic Reporters' Forum (ERF) and PEB at the ERF auditorium in Dhaka yesterday.

He said Bangladesh stands to lose a lot of preferential market access after LDC graduation, making efficient logistics and competitive transport systems indispensable for its export sustainability.

Yet, logistics costs remain among the highest globally. In some key sectors, costs are up to 48 percent of sales.

"A vibrant automobile sector, backed by smart, inclusive policy, is essential not just for safer roads but for a greener, more resilient Bangladesh."

Commerce Adviser SK Bashir Uddin said Bangladesh must rethink its industrial policy.

Referring to the automobile sector, he said, "Placing foreign kits on local frames is not real manufacturing."

"Our economy needs productivity-driven investment, not vanity infrastructure," he added.

Bashir said Bangladesh pays $27 billion yearly for freight while local shipowners earn just $1 billion.

Anwar-ul-Alam Chowdhury Parvez, president of the Bangladesh Chamber of Industries, said they spend more on logistics than any other country. The logistics cost here even surpasses that of the United States.

Matiur Rahman, president of the Bangladesh Motorcycle Manufacturers and Assemblers Association, criticised authorities for the lack of implementation of the automobile policy.

This hinders the growth of the automobile industry, he said.

Rizwan Rahman, former president of Dhaka Chamber of Commerce and Industry, called for prioritising environment-friendly public transport over private vehicles.

ERF President Doulot Akter Mala chaired the event.