Companies

Tatas ‘not doing enough’ to retain control of Bangladesh CV market: Nitol-Niloy

Pratim Ranjan Bose Abhishek Law Kolkata | Updated on January 09, 2018

Abdul Matlub Ahmad, Chairman of Bangladesh’s Nitol-Niloy Group   -  Debasish Bhaduri

Tata Motors’ trusted channel partner in Dhaka on Saturday reminded the automaker that it might not be doing enough to retain majority control over the Bangladeshi commercial vehicles (CV) market in the face of increasing competition from China, Japan and South Korea.

Speaking at a CII seminar here on Manufacturing Excellence’, Abdul Matlub Ahmad, Chairman of the Bangladesh-based, ₹1,500-crore Nitol-Niloy Group pointed out that Indian producers often lack the drive to convert their capabilities into market opportunities.

The immediate point of reference is concern over availability of spares, he added.

According to Ahmad, buyers in Bangladesh often run into trouble as the OE (original equipment) suppliers change the product profile depending on Indian market conditions.

Such problems arise due to differences in market dynamics in the two nations. Bangladesh, for example, has more flexible emission control norms than India.

But unless automakers devise an alternative strategy to keep overseas buyers happy, they may lose out on market opportunities, he said.

Tata’s mini-truck Ace has good market potential in Bangladesh, Ahmad said, adding he wanted the company to set up an assembling unit in his country to ensure the supply of spares.

But the project did not take off because Indian OE suppliers were not keen on setting up a base in Bangladesh. The small market size may be the reason, Ahmad conceded, but added that Bangladesh offers 20 per cent export subsidy on engineering products.

This, coupled with zero duty imports to India, can make Bangladesh a cheaper destination for Tata Motors to source original equipment for Indian operations.

Nitol-Niloy also has a joint venture with Hero MotoCorp to manufacture two-wheelers in Bangladesh. Hero decided to address buyers’ concern by setting up an “ancillary village”. One-third of the capacity of the unit is used for exports to North-East Indian markets.

“If you are in a foreign land, please try to listen,” was his piece of advice to Satish B Borwankar, COO, Tata Motors, present on the dais. Borwankar later told BusinessLine he would try to address the concerns raised by Ahmad.

Joint venture offer

The advice came with an offer. “We formally proposed to the Tatas to assemble passenger cars in a joint venture in Bangladesh,” Ahmad told newspersons.

This includes assembly of the Nano, which is seeing tepid demand in India.

In a previous interaction, Ahmad said he was keen to set up a gas-based unit in Tripura with an eye on the North East and Bangladesh markets.

On Saturday, he did not divulge fresh details of his investment plans, but had a one-on-one meeting with Tata Steel Managing Director TV Narendran, who was also present at the seminar.

Published on August 27, 2017

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