One of the country's leading automobile distributors, Rancon Motors, is to assemble Mercedes-Benz buses in Bangladesh for the first time, in an attempt to tap the growing demand for luxury buses among the long distance coach companies.
“The market for luxurious buses is growing. We hope it's an opportunity to tap the potential,” said Romo R Chowdhury, managing director of Rancon Motors, promoting the Mercedes-Benz brand in Bangladesh.
“We are hopeful to hit the market by June 2009,” he said.
The company, according to its managing director, will be able to cut the price of Mercedes-Benz buses by about Tk 40 lakh to nearly Tk 1.10 crore after the establishment of the assembling plant.
Currently one Mercedes-Benz bus costs around Tk 1.50 crore as it enters Bangladesh in completely built form.
“It will be affordable to many bus companies due to assembling facilities here,” the Rancon MD said.
Rancon Motors, a concern of Rangs Group, took the initiative after it signed commercial vehicles supplying contracts with some local long distance bus operators such as Saudia and S Alam.
“We are facing demands from some other operators because the buses are fuel-efficient,” he said.
Luxurious commercial passenger vehicles made their ways on Bangladesh roads during the late nineties to cope with the changes in the tastes of consumers who are travelling by buses at a growing rate due to faster road communication compared to railway's.
The market for luxurious bus, according to operators, is about 60-80 units a year, and is growing between 15 and 20 percent annually as leading long distance bus companies are shifting their focus to this segment.
At present, operators such as Green Line and Sohag Paribahan are offering services with Scania and Volvo buses on different routes, while Saudia and S Alam have brought Mercedes-Benz buses by forming joint venture.
Operators said none of these brands is assembled here, rather being imported from India and Malaysia.
Local Navana Group, IFAD Autos and Nitol Group assemble Hino, Ashok Leyland and Tata brand buses.
The required investment for establishing a bus assembling plant is lower compared to that for setting up an automobile assembling unit, Romo said.
“We now depend on Malaysian companies to assemble and build the bodies of the Mercedes-Benz buses. The local assembling plant will help us offer lower prices due to cheap labour here,” he added.
Rancon Motors, which currently imports auto parts from Brazil, has already got go-ahead from Mercedes-Benz owner Daimler AG to assemble the bus.
“We have already got the Daimler permission to assemble the bus,” Romo said. “Now we are in talks with a Malaysian bus-body building company to sign a technology transfer agreement.”
“Hopefully we will be able to ink the deal within the next two months,” he added.
Rancon Motors, also distributor of Mitsubishi brand autos in Bangladesh, will initially invest Tk 15 crore to start the plant in Savar, Dhaka and expects to assemble around 10 units of buses a month.