MARKET STUDY ON MOTORCYCLE IN BANGLADESH

Runner
Runner produces motorcycle for local market. The current target is 40,000 somewhat lower than the previous year because of political instability thus economic recession. But on average its target market is 35,000 to 36,000.Runner applies stoveing paint, TSA & PU to paint frame, fuel tank & ABS parts respectively. Their pick period for sales is from October to December & pick off period is from January to March. They had a plan to export in the very year but not started yet. They are optimistic to export in the near future.

Walton
Walton is a local motorcycle manufacturer with the market share of 10.57% in 2013.walton paints all the motorcycle parts locally. They use imported Chinese paint for their motorcycles. They use PU & ED painting method. During the all type of election period their motorcycle selling increases. Their pick period is from September to February & pick off period is from April to July. They import 30% motorcycle parts that dont require any painting. Walton is going to manufacture automobile in the near future.

Uttara motor
Uttara motor, Motorcycle market leader is going to be the largest motorcycle manufacturer in BD. initially they will assemble motorcycle parts that will be imported but painting will be done by local companies like Dhaka plastic or RFL. Uttara has the target to sell 1, 00,000 motorcycles in 2013.Their sales target increases by 25% to 30% every year. All election period is the most auspicious time for this market giant as sales increases during election periods. Their pick off period is October to march. They have a plan to export motorcycles in Africa after manufacturing motorcycles locally.

HPM
HPM Autos has come in 2012 in the Motorcycle manufacturing industry.HPM aims to provide local urban and rural market with a total of 5 fashionable yet durable motorbike models. They have a safe capacity to manufacture 30,000 motorcycles a year. HPM started motorcycle painting from the October 2012. Currently they are not manufacturing motorcycles. They imported paint from Pakistan with regular duty they dont have any plan for manufacturing motorcycles in 2014.

Agreement Cancelled: Honda & Atlas

Atlas was the only importer of Honda motorcycle in BD. They stopped importing Honda motorcycles in the middle of the year 2011 as they had an agreement with Honda for establishing a manufacturing plant in BD. But the agreement has been cancelled 4months earlier. Since the middle of the 2011 Honda motorcycles are not being imported in BD.

New Agreement: Nitol-Niloy & Honda

After the cancellation of the agreement with Atlas of BSEC (Bangladesh Steel & Engineering Corporation), Honda has made a new agreement with Nitol-Niloy group to establish a motorcycle manufacturing plant at konabari in Gazipur. The agreement is at the very initial stage now.

Atlas & Hero Honda

Atlas Bangladesh ltd. is the assembler of the Hero Honda in Bangladesh. Atlas has the target to sell 65,000 motorcycles in 2013. Their pick period for sales is from March to June & pick off period is from January to February. The agreement between Atlas Bangladesh & Hero Honda will remain in force up to the June, 2014. Then the government will make a new policy. If the government wants so Atlas will go for manufacturing. It is told that Hero Honda wants the majority share if a manufacturing plant through joint venture is established in Bangladesh. But being a govt. concern Atlas is not ready to hand over the majority share.

TVS
TVS auto Bangladesh is the assembler of TVS motorcycle in BD. It has a target to sell 65,000 motorcycles in 2013.Their market growth is 25% every year since the beginning. Their pick sales period is during Eid & election period & rainy season is their pick off period. They are not going for manufacturing soon. They will take time to go for manufacturing.

Yamaha
We focus on quality and our motorcycles are not for all bike riders. Rural people basically dont buy our motorcycles. Young generation is our target. Yamaha doesnt have any target to reach as others. Demand for their product is almost zero in rural areas. So rainy season, flood have barely effect on sales thus assemblage. On average sales remain same all the year round except the Eid (pick time period).Their manufacturing capacity is 50 motorcycles per day. They assemble almost 50 motorcycles per day too. Yamaha parts are painted in India
Focus Runner Annual Market Demand in BD Annual manufacturing in BD 2,00,000 to 2, 15,000 25% to 30% (51,875 to 62,250) Uttara motors 3, 00,000 Company name Walton 3,50,000 to 4,00,000 30% (1,05,000 to 1,20,000)

Nitol-Niloy group 2,00,000

DHS Honda -

Runner-10% manufacturer Walton-40% to 45% manufacturer Runner-90 % Walton-50% to 55% Uttara motors-100% Almost 40% (1,20,000) -

Annual importation in BD Market Share Out of 100% Manufacturing Capacity per day Per Day Production Annual Production Target market (in 2013) Pick period

70% (1,40,000 to 1,50,500) 16% to 18% (33,200 to 37,350) 500 to 600

70% (2,45,000 to 2,80,000) 15% (52,500 to 60,000) 500

500 (initially they will assemble 150 per day) -

35,000 to 36,000 40,000 October> December January > March Missing

1,00,000 (They will) 1,00,000 Before all election period (October > March) Winter & summer season 20,000 to 30,000 motorcycles selling increase per year for Uttara motors. Quality

200 to 300 but on average 200 30,000 to 40,000 Up to 36,000 September > February April > July In total 20 to 25 metric tons 20% to 25% annually

Pick off period Annual paint consumption Likely % of market growth Expectation from Berger paints

Not sure but Its increasing

Quality

Quality & price too

Note: Its observed that Nitol-Niloy group is not clear about the total market demand for motorcycles in Bangladesh. According to Uttara Motor, winter & summer season are pick off period but the demand in Dhaka does not depend on season. It depends on election period & necessity of consumers. The demand for motorcycles is increasing by 20% to 25% per year.

MOTOR CYCLE PAINTING

1. Frame/Chassis (MS) Painting: a. PTC b. Jensolin Stoving Paint 2. Fuel Tank (MS) Painting : a. PTC b. TSA Paint 3. ABS Part ( Side cover,) Painting: a. Surface cleaning b. PU Paint

Pretreatment Chemicals (PTC):

There are two types of pretreatment chemical process Pretreatment Chemicals (PTC): Cold Process Step Stages Name of Chemicals Conc (%) Temp. Time

Degreasing Water Rinse Derusting Water Rinse

Gardoclean 619

5%

Ambient Ambient Ambient Ambient

15-20 mins 1-2 mins 10-30 mins 1-2 mins 30-60 sec 30-40 mins 1-2 mins

Gardacid -201M Gardacid-206AA

45% 1%

3 4

Surface Activation Phosphating

Gardolene-26M Gardobond-C C.C no-1

1% 7% 0.025%

Ambient Ambient

Water Rinse Ambient 0 * Drying the components at 100 C for 10 min and paint within 8-10 hours

Pretreatment Chemicals (PTC): Hot Process

Step 1

Stages Degreasing Water Rinse Derusting Water Rinse Water Rinse

Name of Chemicals Gardoclean 444

Conc (%) 4-5%

Temp. 650C Ambient Ambient Ambient Ambient

Time 8-10 mins 1-2 mins 10-30 mins 1-2 mins 1-2 mins 20-30 mins 1-2 mins

Gardacid -201M Gardacid-206AA

35-40% 1-2%

Phosphating Water Rinse

Gardobond-78 C.C no-1

5-6% 0.025%

70-750C Ambient

Passivation Gardolene-86 0.025% 50-550C 30-45 sec 0 * Drying the components at 80-100 C for 10 min and paint within 8-10 hours

Special Notes to remind: * All the above parameters are indicative and may have to be changed at the time of original plant trial. * Concentration and process time will depend on the amount of grease and rust present on the component surface. Tanks recommend for pre-treatment chemical tank: Tank material- MS lined with PVC/frp/rubber or S.S-316. Thickness- 3-5 mm Nozzle/fittings- S.S or PVC Tanks recommend for pre-treatment Water tank: Tank material- MS. Thickness- 3-5 mm Nozzle/fittings- S.S or PVC

Fuel Tank: After completing PTC:

1. Frame/Chassis (MS) Painting: a. PTC b. Jensolin Stoving Paint: 1. Jensolin Stoving primer Surfacer-Grey 2. Jensolin Stoving Enamel-Black

1. Frame/Chassis (MS) Painting: 1. Jensolin Stoving primer Surfacer-Grey Sl. 1 2 Product Jensolin Stoving Primer Surfacer-Grey Jensolin Thinner T-1 Qty 400 140 Flash Off 10 Stov Time 35 Temperature 130-140

2. Jensolin Stoving Enamel-Black Sl Product Qty Flash Off Stov Time Temperature

1 2

Jensolin Stroving Paint-Black Jensolin Thinner T-1

400 120

10

30

135-145

Unibake Epoxy Primer Surfacer Grey/White 2. TSA Base Coat Metallic Cocktail Blazing Red 3. TSA Top Coat Cocktail Blazing Red 4. TSA Top Coat High Solid Clear

Unibake Epoxy Primer Surfacer Deca White/Grey: Sl 1 2 Product Unibake Epoxy HLPS Primer Grey;APD/2644 Thinner Qty 400 140 Flash Off 10 Stov Time 40 Temperature 140

TSA Base Coat Metallic Cocktail Blazing Red Sl 1 2 Product TSA Base/Coat Metalic CocktailCandy Red-APD/2643-1 Thinner Qty Flash Off 400 10 120 Stov Time 30 Temperature 135-145

TSA Top Coat Cocktail Blazing Red Sl 1 2 Product TSA Top Coat Candy Red-APD/2642 Thinner Qty 400 120 Flash Off 10 Stov Time 30 Temperature 135-145

TSA Top Coat High Solid Clear (after inserting sticker): Sl 1 2 Product TSA Top Coat Clear Lacquar-APD/2641 Thinner Qty 400 120 Flash Off 10 Stov Time 30 Temperature 135-145

Painting system for ABS Part (side cover): 1. PU Base Coat Metallic Cocktail Blazing Red 2. PU Top Coat Cocktail Blazing Red 3. PU Top Clear

Painting system for ABS Part (side cover): 1. PU Base Coat Metallic Cocktail Blazing Red Sl Product Mix Flash Off Stove Time 30 Temperature

1 2 3

PU Base Coat Metallic Cocktail Blazing Red PU Base Coat Catalyst Thinner

100 6 as required

7-10 mins

80

Painting system for ABS Part (side cover): PU Top Coat Cocktail Blazing Red Sl Product Mix Flash Off Stov Time Temperature

1 2 3

PU Top Coat Cocktail Blazing Red PU Top Coat Catalyst Thinner

10 1.5 as required

7-10 mins

30

80

Painting system for ABS Part ( side cover): PU Top Clear Sl 1 2 3 Product PU Top Coat Clear PU Clear Coat Catalyst Thinner Mix 100 15 as required Flash Off 7-10 mins Stov Time 30 Temperature 80

Actual sales in 2012 Company name Target sales Unit) 60,000 40,000 1,00,000 70,000 65,000 15,000 (Motorcycle Actual sales (motorcycle unit) 33,500 27,500 *520 87,000 57,200 45,600 10,500 2,61,820 Market share

Runner Walton HPM Uttara Motor Hero Honda TVS Yamaha Total sales

12.80% 10.50% 0.20% 33.23% 21.85% 17.42% 4.01% 100%

1. Grey shade indicates Non-Manufacturing part of the Motorcycle market. 2. *HPM produced 520 motorcycle during October - December, 2012

Market share of motorcycle Manufacturers & Non-Manufacturers in 2012

Manufacturing 23.5%

NonManufacturing 76.5%

Market share in 2012

Motorcycle Market in 2013 Company name Target sales (Motorcycle unit) 40,000 40,000 6,000 1,00,000 65,000 65,000 15,000 Actual sales (Motorcycle Unit) 33,000 30,250 1,000 95,700 60,000 54,720 11,550 2,86,220 Market share

Runner Walton HPM Uttara Motor Hero Honda TVS Yamaha Total sales

11.53% 10.57% 0.35% 33.44% 20.96% 19.12% 4.04% 100%

Market share of motorcycle Manufacturers & Non-Manufacturers in 2013

Manufacturing

Market share in 2013

Probable sales in 2014 Company name Probable Actual sales 48,222 39,907 1,30,000 51,690 52,928 12,128 3,34,875 Market share Sales Growth

Runner Walton HPM Uttara Motor Hero Honda TVS Yamaha Total sales

14.4% 11.92% 38.82% 15.44% 15.81% 3.62% 100%

46.13% 31.92% 35.84% -13.85% -3.27% 5%

1. Motorcycle market growth in 2014 17% 2. HPM has no projection for 2014. its manufacturing is stopped for this year.

Market share of motorcycle Manufacturers & Non-Manufacturers in 2014

Manufacturing 26.32%

Probable sales in 2015 Company name Runner Walton HPM Uttara Motor Honda Hero Honda TVS Yamaha Total Target sales Probable actual sales 60,780 47,244 1,62,500 20,000 *45,695 56,245 12,735 4,05,199 Market share 15% 11.66% 40.10% 4.94% 11.28% 13.88% 3.14% 100% Sales Growth 26.04% 18.39% 24.62% -11.60% 6.27% 5%

1. *The agreement between Atlas motorcycles BD & Hero Honda will remain active up to 2014. The government will make a new policy by the end of 2014. 2. Motorcycle market growth in 2015 21% 3. Initially Honda will manufacture 20,000 motorcycles Market share of motorcycle Manufacturers & Non-Manufacturers in 2015

Manufacturing 71.20%

Market share at a glance. . . Year 2012 2013 2014 2015 Total market 2,61,820 2,86,220 3,34,875 4,05,199 Total manufacturing 61,520 (23.5%) 64,250 (22.45%) 88,129 (26.32%) 2, 90,524 (71.20%) Total Non- Manufacturing 2, 00,300 (76.5%) 2, 21,970 (77.55%) 2, 46,746 (73.68%) 1, 14,675 (28.80%)

Pick & pick off time for different customers Company name Runner Walton Uttara motors Pick time October> December September > February Before all election period (October > March) March > June During Eid festival Pick off time January > March April > July Winter & summer season

Hero Honda TVS

January > February Rainy season August) (June >

Yamaha

During Eid festival

1. Motorcycle importers do complete importation before national budget as tax may arise after passing the budget. 2. Demand for Yamaha motorcycle is almost zero in rural areas. So rainy season, flood have barely effect on sales thus assemblage. On average the sales remain stable all the year round except Eid festival (pick time). 3. Demand in Dhaka is not related to season rather than related to human need or want.