Local entrepreneurs cannot seize the market for lack of skilled workforce, technology
Bangladesh still has to depend heavily on imports when it comes to tyres of heavy vehicles as local entrepreneurs have not yet tapped the huge potential of the sector for lack of skilled workforce and technology, both involving a huge investment.
The total market size of tyres stands at around at Tk3,000cr, of which the share of imported brands is 60% to 70%. Tyres are mainly sourced from China, India, Japan, Indonesia, the Philippines and Vietnam, according to market player.
Maxxis, CST, MRF, Apollo, Hankook, Bridgestone and CEAT are among the imported brands dominating the big truck-bus tyre segment.
In the car tyre segment, users prefer Dunlop, Maxxis, Hankook, Toyo, yokohama, MRF, Presa, Bridgestone, Goodyear and CEAT tyre.
The Indian MRF tyre holds a big chunk of the market share while the market is flooded with a huge supply of Chinese non-brand tyres.
Rahimafrooz, the sole distributor of two most prestigious global tyre brands Dunlop and Apollo, enjoys 15% to 16% share in the market.
Talking to Dhaka Tribune, Rahimafrooz GM and head of sales and marketing-(tyre) Mokhlesur Rahman said: “We are distributing tyre in the entire segment. Apollo tyre comes from India and Dunlop from Japan, Indonesia and Thailand.”
“The tyre market is growing at 8% to 9% annually. As the market is growing, our market share is rising,” he added.
Now, 4,80,000 pieces of tyre are needed in the truck, bus, jeep and other passenger vehicles segment in a year. Imported brands meet around 99% demand in this segment, according to industry insider.
HNS Group is an importer of Korean Hankook tyre brand.
Talking to Dhaka Tribune, Md Ariful Islam, DGM (head of sales and marketing) of HNS Group, said the tyre market was growing very fast — at 12% every year.
“Hankook's market share is not very high here. But we are distributing premium quality tyres,” He added.
According to industry people, 10,9,300 pieces of tyres were imported in 2015-16 fiscal year. Of them, 41,879 pieces were imported in the big truck-bus tyre segment, 35,770 pieces in the passenger vehicle segment, 31,651 pieces in the light truck-bus segment. Currently, the volume of imports has increased several times.
The tyre market grows at 7% in the big truck-bus segment, 6% in the passenger vehicle segment and 9% in the light truck-bus segment, according to a survey report by an importer company.
Shawan International imports Maxxis tyre from Thailand and the brand is dominating the car tyre segment.
Shawan International Managing Director Amzad Khan Raju said: “We are in the leading position in the car tyre segment. We enjoys 25% share in the country's tyre market, which is growing rapidly.”
The sector has huge potential but there is no local brand as yet in the big bus-truck tyre segment.
"If the local investors come to the sector, it will reduce our dependency on imports," said Rahimafrooz Product Manager (tyre) Kazi Abidul Hoque.
“There is a lack of skilled manpower in this sector. Besides, for lack of technology and investment, local firms cannot make large truck-bus tyre,” said Kazi Abidul Hoque.
Zico Motors, a retail tyre shop in the city's New Eskaton, is selling at least five to six imported brands of tyre.
Zico Motors proprietor Aminul Haque said: “Tyre sales have increased much. The demand for Chinese brands in the market is high due to low prices. Besides, Japanese, Thai, Indian and Korean tyres are also popular."
Despite high demand for heavy vehicle tyres, local companies are yet to make an entry into the sector as it requires huge capital investments.
“The market of tyres of truck, bus, jeep and other passenger vehicles is still dominated by imported brands,” said Tarun C Rajbongshi, head of marketing and sales of Gazi Tyres.
There are two ways of manufacturing tyres: bias and radial. "Local companies use bias plant to reduce costs. It is not possible to make large truck-bus tyre with bias plant," pointed out Tarun C Rajbongshi.
Radial tyres are, however, getting thanks to their durability. "Using a radial plant is very expensive, which is not profitable for us at this time. In future, we will make tyre using radial plant," he added.
According to Bangladesh Road Transport Authority,4,68,706 motorized vehicles were registered in countrywide in the fiscal 2017-18 year. At the end of June, 2018, the total number of registered motorized vehicles in the country stood at 37,13889. It was 1,75,000 in 1987.