Runner Automobiles to make Bajaj three-wheelers

Leaving behind pandemic disruptions, Runner Automobiles is to begin manufacturing Bajaj three-wheelers at its new plant in its factory complex this year.

The Tk300 crore project was to be finished this month and its 2.5 lakh square feet shed in Bhaluka, Mymensingh is ready.

But the Covid-19 pandemic disrupted the progress in machinery installation, forcing the company to defer the deadline by 10 months, the automobile manufacturer says in a stock exchange filing.

The publicly listed company wrote for the Bangladesh Securities and Exchange Commission's (BSEC) approval of the plan to defer utilisation of the Tk100 crore in funds it raised from investors with an initial public offering in 2019.

It is investing Tk63 crore from the funds in the three-wheeler project.

Runner, the pioneer motorcycle manufacturer in Bangladesh, is also going to be the first local three-wheeler manufacturer under a technical collaboration agreement with India-based Bajaj Auto, the global leader in three-wheelers.

The plant will have welding, painting, assembling, and testing facilities, to make Runner a full-fledged three-wheeler manufacturer.

Top company officials in the latest annual report said they expect manufacturing to begin in mid-2022.

A top executive at the company, seeking anonymity, on Monday told The Business Standard, "We are heading for trial runs by July and a few months later, commercial production will begin at the new plant."

He said the market for three-wheelers run on compressed natural gas (CNG) or liquefied petroleum gas (LPG) is expected to bounce back to  pre-Covid levels as soon as schools fully reopen leaving behind pandemic worries.

The three-wheeler market has huge potential if the government can bring discipline to the segment in terms of registration and route permits for authorised vehicles, and prevent unauthorised battery-run three-wheelers, popularly called "Easy Bikes."

Currently, 60% of gas-run three wheelers remain unregistered due to the excessively rigid registration stance of the government.

In 2021, the sales of fossil fuel-run three-wheelers in the country dropped to 22,000 units, which was above 36,000 before the pandemic, and once peaked to 40,000 units in 2017.

Local manufacturing would also help the company reduce unit prices from the current level of Tk4.35 lakh for LPG-run Bajaj three-wheelers being assembled by Runner.

Local manufacturing would reduce the total burden of duties and taxes by around 40% and as soon as Runner is able to source more local components the cost would drop further.

Bajaj dominates 90% of the country's fossil fuel-run three-wheeler market, mostly being sold by Uttara Motors, the importer and distributor of Bajaj's CNG-run three-wheelers.

The completely built units are subject to near 100% taxes and duties right now, and Runners manufacturing plant would bring it down to 53%, said the Runner official requesting anonymity.

Following a good customer response to its e-bikes last year, Runner is planning for electric two- and three-wheelers in the coming days, according to its latest annual report.

Alongside manufacturing a wide range of two-wheeler models under its own brand, it is also assembling and distributing UM, Aprilia, and Vespa two-wheelers, and distributing KTM motorcycles in the country.

Right now, Runner has over one-fourth of the three-wheeler market and more than one-third of the truck market.

Runner Motors, a subsidiary of the listed company – is the sole distributor of Eicher trucks in the country.

Runner shares closed 0.9% lower at Tk53.5 each on Monday on the Dhaka Stock Exchange (DSE).