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Nitol-Niloy Group, importer of Tata vehicles in Dhaka, has invited Tata Motors to set up Tata Ace assembling unit in Bangladesh to cater to north-eastern India and Myanmar markets.
Abdul Matlub Ahmad, Chairman, Nitol-Niloy Group, wants Tata Motors to leverage their existing JV, Nita Co, to add the assembling unit.
Nita Co, the sole distributor of Tata Motors’ trucks in Bangladesh, has an assembling unit for medium and heavy-duty vehicles.
According to Matlub, a mere 25 per cent localisation can help the JV to earn 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.
“It would be more viable, both logistically and production-cost wise, if Tata Motors can leverage the Bangladesh facility to cater to the North-East of India and also to Myanmar,” he told reporters on the sidelines of CII’s eastern regional meeting here.
In case Tata Motors agrees to this arrangement, Ahmad will have to add a capacity of nearly 50,000 vehicles annually.
Investments towards capacity expansion in Bangladesh will be made by the Nitol-Niloy Group.
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