A growing demand for commercial vehicles has encouraged Nitol-Niloy Group to start assembling Tata pickup trucks in Bangladesh from this month.
“Now we will assemble the pickup, but we have a target to manufacture at least 25 percent of the components locally by 2020,” said Abdul Matlub Ahmad, chairman of Nitol-Niloy Group.
The group initially plans to assemble 800 pickup trucks every month at a plant of Nita Company Ltd, a joint venture of Nitol and Tata, located in Jessore.
Currently, chassis of trucks, buses and minibuses are imported in completely knocked down (CKD) condition and assembled at this plant.
Bangladesh Road Transport Authority (BRTA) data showed that the demand for pickup trucks was over 1,000 units per month last year and the growth rate was over 18 percent.
BRTA gave registration to 13,512 units of pickup trucks of different manufacturers in 2017, up from 11,371 units in 2016; 10,257 in 2015 and 9,554 in 2014.
“We will start assembling pickups this month and it will be the beginning of automobile manufacturing in the country,” said Ahmad, also a former president of the Federation of Bangladesh Chambers of Commerce and Industry, the apex trade body.
He believes Nitol Motors would be able to introduce a “made-in-Bangladesh” pickup truck in January 2021.
Ahmad said as per international practice at least 25 percent of the components of a vehicle must be manufactured locally to call it a local product.
Nitol Motors would manufacture the chassis, body, pinion, wheel rim and brake components, which would be economically viable. Ahmad said Tata would directly supply the rest of the components to the manufacturing plant.
Nitol Motors started assembling Tata buses and trucks in 1991 and has been Tata Motors' partner since 1988.
Now, it is the largest distributor of Tata Motors in South Asia, and the most dominant player in the country's commercial vehicle market having over 40 percent of the market share. According to Nitol Motors, it accounts for over two-thirds of the pickup truck market in the country and it has been growing at a double digit rate for the past five years.
Ahmad said Nitol needs to invest around Tk 300 crore in the existing assembling plant to upgrade it for manufacturing pickup trucks and it would need Tk 800 crore to go for manufacturing trucks and buses in the future.
He said assembly of pickup trucks would reduce its present price in the domestic market by Tk 1 lakh per unit.
Nitol-Niloy Group has a diversified profile with exposure to assembling of vehicles, bus body making, after sales support, transport and aviation services, financial institutions, manufacturing industries, real state, properties development and sports promotion.
The group's annual turnover was $128 million, equivalent to over Tk 1,000 crore, last year, according to its website. It has so far invested around $260 million and employs 3,170 people.