The Japanese auto giant is looking to expand its footprint in the country as it expects the automobile market to grow further along with its economy
Automobile giant Mitsubishi Motors is set to establish a manufacturing plant in Bangladesh, as a part of the company’s expansion in South Asia by 2025.
State-owned Bangladesh Steel and Engineering Corporation (BSEC) and Mitsubishi signed a memorandum of understanding (MoU) on Thursday.
In order to meet the country’s growing demand for cars, the Japanese company has been looking into ways to invest in Bangladesh for the last couple of years.
However, details about the amount of investment, production capacity, and the models that the Bangladeshi production unit will manufacture and the exact date for the production to start have not yet been disclosed.
These details will be determined based on the feasibility study - likely to be completed in December - that both parties will now conduct.
Ever since 1977, the famous Japanese brand has outsourced its production in Bangladesh to Pragoti Industries, whose parent company is BSEC.
Mitsubishi currently has no plants in Bangladesh in which the company holds an ownership stake.
Pragoti Industries is basically an auto assembly and parts manufacturer which is currently manufacturing the Pajero Sport, ASX and a few other models.
Last month, the two parties were in the final stage of coming to an agreement.
Industries Minister Nurul Majid Mahmud Humayun has urged for more foreign and local investments to accelerate industrialization. Not only in the automobile sector but also in the sugar, agro-food processing and ship recycling industries.
Japanese ambassador to Bangladesh, Ito Naoki said: “This is a historic moment,” and expressed his satisfaction over the progress of the MoU signing for the feasibility study of setting up a Japanese car manufacturing plant In Bangladesh.
According to Mitsubishi’s data, the brand has sold 1,700 vehicles and produced 200 cars in Bangladesh in 2020—the figures which the company plans to increase once the plant is set up.
To put things in perspective, in the last fiscal year-- amid the pandemic, 12,403 new sedans and 4,911 new SUVs were registered according to Bangladesh Road Transport Authority (BRTA).
The Japanese auto giant is looking to expand its footprint in the country as it expects the automobile market to grow further along with its economy.
Mitsubishi plans to cater to the South and Southeast Asian markets to increase its sales, as the economies of these countries are growing fast.
Currently, the company has its production bases in five countries in the Association of Southeast Asian Nations, including Thailand and Indonesia.