Bangladesh Automobile Market

Bangladesh Automobile Industry

• In Bangladesh, more than 80% cars are coming from Japan

•About 2,000 new cars are usually sold in the local market per year with 10 percent growth

•Around 70 percent of new cars are used for commercial purposes, with the remaining 30 percent for personal use

•Japanese Toyota still leads the market in both used and brand new car segments

• Rangs Limited—the leading automobile import and distribution company in Bangladesh have signed a contract with IFS, the global enterprise applications company, to implement IFS Applications across its main

areas of operation: unit sales, spare parts and service processes

•Walton HIL (High-Tech Industries Ltd) of the country's leading conglomerate R.B Group is preparing to manufacture cars and pick-up vans by early 2015

•The country imports about 20,000 reconditioned cars a year -- mainly from Japan

Market scenario

• The automotive market in Bangladesh has been dominated by Japanese, Korean, Chinese,

German, Indian and other car companies; There being no automotive industry in the country, they have to import cars from abroad by paying high amount of taxes

•Taxes are being increased, but people’s earning hasn’t been increased that much

•Due to the political unrest of the country, investors are not showing interest to invest in automotive

field in Bangladesh

•Moreover, there are no proper privileges for the persons who are interested to setup automotive industry

•Efficient Labor crisis for car manufacturing is another problem

Problem areas

•Since the population of Bangladesh is increasing day by day, the demand of automotives is also increasing as well

•Over the last few years, the unemployment rate went down and foreign investment increased

•People can now afford personal transportation facility

•Especially in capital Dhaka and port city Chittagong the demand of cars,

motorbikes and commercial vehicles is much higher

Opportunity areas

Key Players

•In Bangladesh, there are 3 main players in the automobile market:

•Toyota

•Mitsubishi

•Ford

COMPETITOR ANALYSIS

TOYOTA

•Company name: Toyota Motor Corporation

•Headquarter: Japan

•Areas served: Worldwide

•Founded: August 28, 1937

•Key people: Takeshi Uchiyamada (Chairman) Akio Toyoda (President and CEO)

•Competitors: Bayerische Motoren Werke AG, Chrysler Group LLC, Daimler AG,

Ford Motor Co., General Motors Company, Honda Motor Company, Nissan Motor, Tata Motors, Ltd., Volkswagen AG and many other automotive

companies

Company Profile

BRAND ANALYSIS

•Toyota is one of the most innovative companies and has a strong culture that is focused on constant innovation

•Industry leader in production and sales

•Toyota currently sells about 70 different models of cars under its namesake brand. This does

not only increase brands awareness but also satisfies nearly every consumer group needs

•“Green” cars development.-Toyota understands that environmental friendly cars are the necessity nowadays. Consumers are more selective in terms of CO2 emissions and fuel-

efficiency of the cars

Strengths

•Large-scale recalls: Toyota had quite a few large-scale vehicle recalls over the past few years. The business recalled 9 million vehicles in 2009-2010 and 7.43

million cars in 2012. Such recalls does not only hurt the firm financially but significantly damages firm’s brand

•Weak presence in the emerging markets: Toyota’s main markets are Japan, US

and Europe, while such emerging economies as China or India make only a small percentage of all Toyota’s sales

Weakness

•Positive attitude towards “green” vehicles: Today consumers are more aware of the negative effects (air pollution) caused by cars. Large quantities of CO2 emissions intensify greenhouse effect and negatively impact the life on earth. Thus, consumers are more likely

to buy new hybrid and electric cars that emit less CO2.

•Increasing fuel prices open up large markets for Toyota’s hybrid cars as consumers shift towards efficient cars.

•By introducing new car models, Toyota could satisfy varying consumers’ tastes and needs

and access wider customer group.

Opportunities

•Decreasing fuel prices: There is high possibility that future fuel prices will drop; fuel-efficient hybrid and electric cars will become less attractive to cost conscious consumers.

•New emission standards introduced by the government would require more investments

into producing cleaner engines. More investments mean less profit for Toyota.

•Natural disasters: Toyota’s has manufacturing facilities in Japan, Thailand, China and Indonesia. These countries, including others, are often subject to natural disasters that

disrupt manufacturing in the facilities and decrease Toyota’s production volumes.

•Most of Toyota’s revenue comes from foreign countries. The profits earned abroad must be sent back to Japan and converted to yen. Appreciating yen exchange rate against

other currencies means lower profits for Toyota.

Threats

•Toyota leads the market in both used and brand new car

segments in Bangladesh

•The production of Toyota cars is ever increasing in Bangladesh

•Even for commercial vehicles this is still the favorite brand

Findings

FACEBOOK

384,982 likes 12.2 K people talking about this

No original content. They share content from other Toyota pages.

NO TWITTER HANDLE

WEBSITE

The website is quite informative, looks presentable. The information is mentioned in detail.

The website is user friendly.

WEBSITE CONTENT- VEHICLE MODELS

Features & technicalities of all their cars can be easily found on the website. Colour options of all cars can also be seen.

The interior & exterior of the cars can be seen as well.

WEBSITE CONTENT- GENERAL SPARE PARTS

Categories of Spare Parts & Where to Buy from are also listed.

WEBSITE CONTENT- SERVICES

Service Centers and the services they offer can be easily found on the website. They also have discounts on service charges during certain hours of the day. This is also promoted on the

website.

WEBSITE CONTENT- FIND US

Showroom & corporate office contact details & address can also be found.

•Company name: Mitsubishi Group

•Headquarter: Tokyo, Japan

•Areas served: Worldwide

•Founded:1870

•Key people: Ken Kobayashi –CEO

•Competitors: .Honda, Toyota, Nissan, Hyundai, Fiat, Chevrolet, Maruti Udyog, Tata Motors, Skoda, Toyota, Volkswagen, Ford

Company Profile

BRAND ANALYSIS

•One of the most popular brands in the automobile industry with excellent advertising and brand presence

•Wide range of products

•The Corporation has seven vehicle manufacturing facilities in five countries, Japan, Netherlands, Philippines, Thailand, United States and Brazil

•Has over 30,000 employees in the company

•It is a global brand having a wide geographic reach with strategic alliances

Strengths

•.Economic crisis due to Earthquake in Japan hurt the company financially

Weakness

•Developing hybrid cars and fuel efficient cars for the future

•Tapping emerging markets across the world and building a global brand

•Fast growing automobile market

Opportunities

•Government policies for the automobile sector across the world

•Ever increasing fuel prices

•Intense competition from global automobile brands

•Substitute modes of public transport like buses, metro trains etc

Threats

•Mitsubishi, the sixth largest automaker in Japan and world’s 16th by production, earlier showed keen interest after companies from South Korea and Malaysia

planned to set up car plants in Bangladesh to tap the growing market

•Currently in Bangladesh, a state running company ‘Progati’ has been manufacturing Mitsubishi vehicles at a very low rate

•They are planning to increase their market share in Bangladesh, according to them, Bangladesh has huge potential to grow as an emerging market for cars

•Rangs Motors, the market leader in the branded car segment and sole distributor

of Mitsubishi vehicles, has a 38.6 percent share of the new-car market

Findings

FACEBOOK

57,074 likes 1.3 K people talking about this

Facebook page is much more impressive than Toyota;

Latest post trends: Product related posts

Post frequency : Irregular posts

October 14th: 3 posts

October 13th: 4 posts October 12th: 2 posts

October 9th: 1 post October 5th: 3 posts October 4th: 3 posts

October 3rd: 1 post

Products are promoted with brilliant images and content

Unique creatives

NO TWITTER HANDLE

NO DEALER WEBSITE

FORD

•Company name: Ford Motor Company

•Headquarter: U.S.

•Areas served: Worldwide

•Key people: William C. Ford, Jr. (Executive Chairman) Mark Fields (President & CEO)

•Main competitors: Bayerische Motoren Werke AG, Chrysler Group LLC,

Daimler AG, General Motors Company, Honda Motor Company, Nissan Motor, Tata Motors, Ltd., Toyota Motor Corporation, Volkswagen AG and many other

automotive companies

Company Profile

BRAND ANALYSIS

•Ford is the second largest automaker in US, the second largest vehicle market in the world.

•Ford’s ECOnetic initiative is an effort to produce highly fuel-efficient engines by improving existing engines rather than new hybrid engines.

•The firm’s profit margin is high compared to competitors.

•Ford has decided to produce single, streamlined global lineup of its models. The carmaker

no longer produces customized vehicles for different regions but focus on designing and engineering the car that fits different regional tastes and regulations. It significantly

decreases costs for Ford and drives record profitability.

•Ford, although not the strongest player in the China has experienced the significant growth in the largest automotive market in the world for the 2012. It grew its sales by 46%,

according to Ford press release.

Strengths

•Ford has been criticized for poor efforts to decrease environment pollution. University of Massachusetts Amherst have rated Ford as the seventh worst air

polluter due to its manufacturing plants. The US Environmental Protection Agency also linked Ford to 42 toxic waste sites.

•Although ‘One Ford’ initiative led to substantial cost reduction, Ford still has a high

cost structure, compared to other automobiles manufacturers. Ford’s costs are driven by its generous employee compensation and pension plans.

•In 2012, Ford lost $1.75 billion in Europe and plans to experience losses in the

region until 2015.

Weakness

•Positive attitude towards “green” vehicles: Cars that are fuel inefficient and emit large quantities of CO2 heavily pollute air and negatively affect the environment. Consumers are aware of this negative impact and are more likely to buy “green”

vehicles that emit much less CO2 and are fuel-efficient.

•A new wave for stricter regulations on vehicle emission standards would positively affect Ford position in automotive industry. Ford invests large amounts of money to

produce fuel-efficient engines and reaped some success with its ford Fiesta and Ford Focus ECOnetic models.

•Ford has great experience in creating strategic alliances and partnerships with other automotive companies. Due to current competitive pressure, all companies are more

likely to enter into such partnerships to drive R&D costs down, access new markets and gain some new skills.

Opportunities

•Rising prices for raw metals will lift the costs for auto manufacturers and

result in squeezed profits for the companies.

•Ford faces more intense competition from other auto manufacturers more than ever, especially in small cars segment with hybrid engines.

•Fluctuating exchange rates: Ford, including other largest automotive

companies, may negatively be affected by fluctuating exchange rates as it earns more than half of its profits outside the US. The profits may be lower

due appreciating dollar against other currencies.

Threats

Findings

•Previously, Mam Automobile was the only official Ford distributor in Bangladesh since 1984

•Ford, the third largest automaker of the world with production of 6.553 million

vehicles in 2007, has partnered with AG Auto with the promise to bring new dimension in the Automobile Industry of the country

•Ford is competing with the Japanese brands that have dominated the market for

the last 30 years

•Ford sold over 100 units of cars, mainly commercially-used double cabin pick-ups, in the first six months of its re-launch in the year 2010

FACEBOOK

18,224 likes 85 people talking about this

No original content; they share content from other pages

NO TWITTER HANDLE

WEBSITE

The website is not very helpful for a user. A lot of links on the website mislead to wrong pages.

WEBSITE CONTENT- SERVICE

The page has no information about the service centers & services offered.

OTHER PROBLEM AREAS ON THE WEBSITE

There is no information on spare parts. When clicked on the link, it takes the user to the company profile.

All the cars are not listed on the website. Those listed, are listed under

‘Showrooms’.

No information about their showrooms available.

Most links redirect the user to the company overview.

When clicked on home, the user is redirected to Ford Asia-Pacific’s website.

Navigating through the website is quite tedious.

•Automotive Industry is currently one of the most important industries of the world

•Though the industry found out it’s introduction in USA and Germany, but now, Japan and China are the countries

having world’s largest automotive industries; Other countries of the world also currently are keeping contribution in this industry

• Online Vehicles Marketplace: Carmudi.com.bd is the only and first vehicles marketplace in Bangladesh

•Top Vehicle Brand: Toyota has always been the favorite brand for the people of Bangladesh

•Traffic concern: As the traffic is currently one of the major concerns of Dhaka, many people especially the young

generation is preferring motorbikes as the best option of private transportation. There are many ongoing flyover projects therefore the situation should improve in another 3-4 years

•Automotive Industry will grow more and more over time as districts like Sylhet, Khulna etc. are also being developed

faster. Also more and more brands are being interested in opening manufacturing factories in Bangladesh

Current scenario

http://www.hoovers.com/company-information/cs/competition.Ford_Motor_Company.7e957f44fa904756.html

http://www.skyscrapercity.com/showthread.php?t=652687&page=3

http://www.ifsworld.com/en/news/2012/2012-06-12-rangs/

http://www.newshour.com.bd/2014/08/04/automotive-industry-bangladesh/

http://news.priyo.com/business/2011/feb/09/19426-mitsubishi-help-set-car-plant-

bangladesh.html

http://www.dhakatribune.com/economy/2013/aug/15/pragati-holding-negotiation-mitsubishi-produce-car

Source

http://www.anwargroup.net/html/s_automobiles.asp

http://archive.thedailystar.net/newDesign/print_news.php?nid=128455

http://businessnews24bd.com/the-future-of-the-vehicles-industry-in-bangladesh/

http://www.thefinancialexpress-bd.com/old/more.php?date=2012-03-12&news_id=123141

https://www.facebook.com/Mitsubishi.Bangladesh

https://www.facebook.com/Navana.Toyota

http://www.anwargroup.com/ford/sales.asp

http://www.amartoyota.com/

Source