Back in gear: Bangladesh's motorcycle market revives after five years of decline

Highlights:

• Bangladesh motorcycle sales rose 8%, ending five-year market decline
• Local factories now supply nearly 99% of motorcycles nationwide
• Production capacity exceeds demand, pushing brands toward export expansion
• Honda and Yamaha led recovery through affordable, fuel-efficient motorcycles
• Government incentives and ride-sharing growth accelerated industry expansion
• Limited local parts production hinders Bangladesh's export competitiveness

After five consecutive years of painful contraction, Bangladesh's motorcycle industry is finally staging a major comeback. A punishing combination of the pandemic and stubbornly high inflation had sent annual sales tumbling from a peak of over 625,000 units in 2020 to just 392,610 units. However, newly released industry data reveals the market has snapped its losing streak, rallying by more than 8% to hit 424,304 units this past fiscal year.

This domestic resurgence coincides with an equally remarkable structural evolution. A decade ago, Bangladesh relied almost entirely on imports, with more than 95% of demand met by fully built imports. Today, local manufacturing and assembly plants supply nearly 99% of the motorcycles on the country's roads.

With a total annual capacity of 800,000 units now comfortably outpacing domestic demand of roughly 500,000 units, homegrown and international brands are increasingly looking beyond local borders to fuel their next phase of growth.

Infograph: TBS

Domestic market bounces back

The export momentum arrives just as the domestic market records its first positive growth in five years, recovering from a deep contraction triggered by the pandemic and persistently high inflation.

Industry insiders said motorcycle sales recovered in 2025 as the market finally emerged from a five-year downturn. While 2021 was heavily impacted by the Covid-19 pandemic, the following three years were marked by a severe dollar crisis, government restrictions on non-essential imports and banks' reluctance to open letters of credit (LCs). As foreign exchange availability improved and banks resumed issuing LCs over the past year, supply conditions gradually normalised. At the same time, many consumers who had postponed purchases during the prolonged slowdown returned to the market, helping drive the recovery in sales.

"Ever since the Covid-19 pandemic, the market has been under severe pressure," said Subrata Ranjan Das, deputy managing director of ACI Motors.

"Even after the pandemic, inflation continued to suppress demand. This year, however, the market has started recovering. As a single company, we achieved more than 25% growth, partly because demand had remained depressed for a long period," he said.

Honda, Yamaha lead market recovery

Data show Yamaha sold 88,289 motorcycles, capturing 20.8% of the market in 2025, while Honda sold 84,813 units, raising its market share to around 20%.

Honda also emerged as the country's best-selling brand in June, accounting for 20.2% of monthly sales, narrowly ahead of Yamaha's 18% share.

Industry insiders attribute the strong performance primarily to affordable pricing strategies and fuel-efficient models that appealed to cost-conscious consumers.

Meanwhile, Suzuki, Hero and Bajaj also recorded positive growth ranging between 8% and 11%, maintaining strong competition in the mid-range motorcycle segment.

These brands now account for market shares of 19.08%, 17.8% and 15.7%, respectively.

Policy drivers and ride-sharing boom

The sector began expanding rapidly after the government reduced the customs duty on completely knocked-down motorcycle imports by 25 percentage points, to 20%, in FY17 to encourage local assembly.

The rapid expansion of ride-sharing platforms further accelerated demand and encouraged manufacturers to invest in local production as it has now attracted an estimated Tk10,000 crore in investment and directly or indirectly employs around 200,000 people.

According to the Bangladesh Motorcycle Assemblers and Manufacturers Association, the country currently has 10 motorcycle manufacturing and assembly plants, producing Japanese brands Honda, Suzuki and Yamaha, Indian brands Bajaj, TVS and Hero, alongside local manufacturer Runner Automobiles.

Milestone exports to Latin America

The latest milestone came in May, when Bangladesh Honda Private Limited exported its first consignment of motorcycles to Mexico, marking an entry into one of the world's largest motorcycle markets.

Manufactured at Honda's factory in Abdul Monem Economic Zone in Munshiganj, the shipment comprised 32 Honda XBlade motorcycles. Earlier, the company had also exported the same model to Guatemala.

"Our priority remains meeting the needs of the domestic market. We are expanding our manufacturing capacity and increasing localisation to offer more affordable motorcycles in Bangladesh while building a cost-efficient production base," Shah Muhammad Ashequr Rahman, chief marketing officer of the company, told The Business Standard.

Highlighting the need for advanced skills and technology, he said, "With Honda's technology transfer, global experience and presence across the world, we have already exported to Guatemala and Mexico and are now continuing exports to Mexico."

Honda is not alone in its global ambitions. Local pioneer Runner Automobiles has already entered regional export markets, including Nepal and Bhutan, solidifying Bangladesh's rising profile in the global automotive landscape.

Structural hurdles hamper export ambitions

Despite the industry's growing export success, manufacturers say Bangladesh still lacks the policy ecosystem needed to become a competitive regional production hub.

Industry leaders said a motorcycle typically requires more than 700 components, yet Bangladesh's light engineering sector currently manufactures only four major components locally: chain drives, seats, stands and batteries.

This heavy reliance on imported parts leaves manufacturers exposed to global supply chain shocks and limits international cost-competitiveness. Furthermore, industry leaders argue that the country's regulatory framework and tax incentives lag behind those offered by competing manufacturing nations.

"Because of delays in customs, bonded warehouses and ports, our operating costs rise considerably," Honda's Ashequr Rahman noted. "Competing with Indian manufacturers under these conditions is extremely difficult."

"India built its motorcycle industry through tax incentives, easy bank financing and strong policy support. It has developed a comprehensive backward linkage industry, allowing manufacturers to source components locally without incurring port or demurrage costs. Without similar policy support, it will be difficult for Bangladesh to compete," he said. 

Hafizur Rahman Khan, president of the Bangladesh Motorcycle Manufacturers and Exporters Association and chairman of Runner Automobiles, said the new government should prioritise local production of motorcycle parts and components.

He called for tax and VAT incentives, along with easier access to bank financing, to encourage investment in component manufacturing.