By
modern standards
the proportion
of cars to the
population in
Bangladesh-about
150 million people-is
way below the
minimum and understandably
so. But for a
country with a
growing number
of middle-income
earners, motorcycles
have become an
affordable alternative
having a high
mileage compared
to cars.
"Bangladesh
motorcycle industry
is growing at
the rate of around
25%, according
to our survey,"
says Ajay Jha,
Chief Operating
Officer of TVS
Auto Bangladesh.
He hopes that
in the current
year more than
110,000 motorcycles
will be sold in
Bangladesh. "So
it is a huge market
for a company
which is looking
for new opportunities."
TVS & Sons,
founded in 1911,
is the largest
automobile distribution
company in India
with a yearly
turnover exceeding
$450 million.
It is also a leading
Indian producer
of motorcycles,
and recently it
signed a joint
venture agreement
with Rian Motor,
a sister concern
of Rangs group.
Rian Motor has
been assembling
and distributing
TVS brand motorcycles
for more than
a decade now.
The new joint
venture, "TVS
Auto Bangladesh"
is the first of
its kind for a
two-wheeler manufacturing
company in Bangladesh.
TVS entered the
Sri Lankan market
in collaboration
with a local distributor,
United Motors.
Later, TVS bought
out the stakes
of United Motors.
Since then, growth
in sales of TVS
brands has increased
in leaps and bounds.
Initially, the
distributor was
selling 3,600
units a year.
That was three
years back. This
year, TVS expects
to sell 45, 000
motorcycles in
Sri Lanka.
"After a
very successful
operation in Sri
Lanka, we planned
to enter directly
into Bangladesh.
Bangladesh market
is much bigger
than that of Sri
Lanka. Moreover,
in Sri Lanka we
have not been
able to penetrate
into politically
unstable areas,
but in Bangladesh
we hope we can
target the entire
market."
The 50%-50% joint
venture will allow
TVS to bring latest
technology from
India and localize
products catering
for the needs
of the Bangladeshi
market. "Now,
we can bridge
the gap between
what customers
require [here
in Bangladesh]
and what we provide,
because we are
here, not in India
and we can see
the local requirement."
Ajay says the
three assembly
lines at the company's
factory in Tejgaon
are being upgraded
under the joint
venture agreement.
"We are also
planning to market
TVS genuine spare
parts. Availability
of genuine spare
parts at a right
price is very
important and
also we will provide
exclusive services
to our customers."
While many motorcycle
companies have
eyed the Bangladesh
market, their
presence has been
limited to activity
through dealership-marketing
their products
through local
distributors.
That is why, Ajay
thinks, customers
in Bangladesh
are being deprived
of getting better
after sales service
facility.
"But motorcycles
are very different
compared to other
products. Your
life will not
be hampered if
your television
does not work
for a few days,
but if your motorcycle
is broken, then
your daily activities
may be hampered.
That is why service
is important for
motorcycles. We
are going to bring
world-class service
to Bangladesh."
In India, TVS
brands range from
80cc to 150cc.
But bikes more
than 125cc cannot
be sold in Bangladesh.
Also the engines
should have four
strokes. So TVS
is assembling
all its four-stroke
motorcycles -100
cc, 120 cc, 125
cc-in Bangladesh.
The new variant
the company is
marketing in Bangladesh
is GLX, which
has electric brakes
and LOIV wheels
[with no spokes]-among
other features.
The company also
expects to market
scooters in the
next two months.
Ajay has been
in Bangladesh
for about nine
months. "After
having studied
the Bangladesh
market, I think
the main factor
for consumers
is mileage. And
TVS gives a good
mileage. We believe
in demand-pull
strategy-let the
customer come
and demand our
product."
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