Honda is to build a new motorcycle production plan to expand its production and sales volume, with Bangladesh Honda Ltd. (BHL) recently holding a groundbreaking ceremony to mark the start of construction in Munshiganj District, Dhaka Division in Bangladesh.

The ceremony was attended by the Minister of Industries, Amir Hossain Amu, MP, and other representatives from the Bangladesh government, as well as Hiroyasu Izumi, Ambassador Extraordinary and Plenipotentiary of Japan to Bangladesh. Representing Honda at the ceremony were Shinji Aoyama, Chief Officer for Regional Operations (Asia & Oceania) of Honda Motor Co, and Yuichiro Ishii, managing director and CEO of BHL.

BHL began local assembly of Honda motorcycles in Bangladesh in 2013 at a leased plant facility. At present, it assembles the CD80, Dream Neo 110, Livo 110, CB Shine125 and CB Trigger 150. It imports two models: the Wave α and CBR150R

Preparing for the future expansion of the market, BHL has acquired 25 acres at Abdul Monem Economic Zone (AMEZ) in Munshiganj District, Dhaka Division, which is located 50km southeast from Dhaka, Bangladesh. BHL plans to make the initial investment of 2.3 billion Bangladesh Taka, equivalent to US$29 million, for the land purchase and construction of the facilities.

The new plant is scheduled to begin motorcycle production in the second-half of 2018, with initial annual production capacity of 1,00,000 units as the first step. BHL plans to continue to invest for expanding its production capacity of the new plant up to 200,000 units by 2021.

In addition to increasing production volume of motorcycles, the new plant will increase the level of local content sequentially.

The Bangladesh government revised its policy for localisation and reduced the supplemental duty this year. Reflecting this change, motorcycle prices declined, and the market is now growing rapidly. As of September 2017, the year-to-date industry-wide motorcycle sales reached 2,70,000 units, largely exceeding 2016 full-year sales. This trend of motorcycle sales expansion is expected to continue in 2018 and beyond.