The government has granted approval for the introduction of motorcycles with engine capacities of up to 350 cc into the Bangladeshi market. Taskeen Ahmed, vice chairman of IFAD Group, said the Ministry of Home Affairs granted final approval in this regard on Thursday.

He anticipates the official launch of the company's 350 cc Royal Enfield in the domestic market in June next year. After that the company will start to export the product in the international market, he said.

Motorcycle Industries Enters Into The New Era Of 350cc

Previously, motorcycles with engine capacities exceeding 165 cc were not allowed in the country. Following this recent decision, not only IFAD's upcoming Royal Enfield but also high cc motorcycles from other companies will now be able to enter the local market, he said.

Taskeen Ahmed revealed that following the agreement with Royal Enfield, IFAD Group made efforts to persuade the government to raise the country's motorcycle engine capacity limits.

"Following our investment, in 2021, the Ministry of Industry granted approval for initial production. However, due to security concerns, local market sales were not permitted by the police. Now, the Ministry of Home Affairs has granted the necessary clearance," he added.

"Until recently, there was no avenue for introducing motorcycles with engine capacities exceeding 165 cc in Bangladesh. With the removal of entry barriers, numerous companies are now poised to invest in the high-powered motorcycle sector," he further said.

IFAD Motors is now setting up its motorcycle factory in Chauddagram upazila of Cumilla to manufacture the iconic Royal Enfield bikes with 350cc and bigger engines.

Confirming the news, Dr FH Ansarey, managing director at ACI Motors, sole distributor and manufacturing partner of Yamaha Motor in Bangladesh, said, "This is great news for the country. The higher the CC of motorcycles, the better the safety. Increasing the CC limit was very important for the country's infrastructure development. As a result of the approval, motorcycle sales will increase in the country. This sector will attract new investments."

The Bangladesh Motorcycle Assemblers and Manufacturers Association (BMAMA) had been actively opposing the government's decision to permit motorcycles up to 350cc on local roads. They contended that the current manufacturers had invested over Tk8,000 crore under the prevailing policy constraints, and any sudden policy alteration would disrupt the market and render their efforts to reach a breakeven point even more challenging.

The Ministry of Industries last year conveyed the opposing arguments to the Ministry of Commerce responsible for formulating and modifying the import policy.

To put an end to this debate, the Bangladesh Trade and Tariff Commission proposed imposing additional registration fees for higher-capacity motorcycles similar to those on cars.

Bangladesh has already seen around Tk8,000 crores in investments in the motorcycle industry. Motorcycle prices have dropped by around one-third since the government introduced policy benefits for local manufacturing four years ago.

Annual sales crossed five lakh units, which was less than two lakhs even in 2016.

Bangladesh Motorcycle Assemblers and Manufacturers' Association General Secretary Biplob Kumar Roy, also the chief executive officer (CEO) of TVS Auto Bangladesh, told TBS the first higher cc bike might hit local roads in January next year subject to necessary changes in the import policy order.

Most of the companies have higher cc products and the market segment would see decent competition among brands, he added. 

Notable motorcycle brands in the country's market include India's Bajaj, Hero, and TVS; Japan's Suzuki, Yamaha, and Honda and Local Runner. As traffic congestion increases and ride-sharing becomes popular, the demand for motorcycles is increasing day by day. Sales are also increasing.

Report and information: The Business Standard