Industry Trend Analysis - Affordability Constraints To Support Honda's Motorcycle Production Plans - JAN 2018

BMI View : We expect strengthening remittance inflows and the need for affordable forms of transport to create the supportive environment for Honda ' s plan to invest in a new motorcycle production facility in Bangladesh .

In November 2017, Bangladesh Honda Private Limited (BHL) announced that it will invest BDT2.3bn (USD29mn) to build a new motorcycle production plant in Munshiganj District, in the Dhaka Division in Bangladesh. The new plant is scheduled to begin motorcycle production in the second half of 2018 with an initial annual production capacity of 100,000 units in its first phase. BHL plans to continue investing further to bring the new facility's production capacity to 200,000 units a year by 2021.

In order to take account of this new production capacity by BHL, we are revising up our motorcycle production forecast for Bangladesh over 2018-2021. We now forecast motorcycle production to average annual growth of 13.7% between 2018 and 2021, up from average annual growth of 5.7% previously. This new facility will allow BHL to deliver products to consumers more efficiently and meet growing local market demand, which will bode well for sales.

New Honda Facility Lifting Outlook
Bangladesh - Motorcycle Production, Units
e/f = BMI estimated/forecast. Source: Bangladesh Bureau Of Statistics, BMI

This article is part of our Asia coverage. To access this article subscribe now or sign up for free trial