Marketing Research on Bangladeshi Car

Finding the Possibility of Creating a Local Car Brand for Middle Income Group Utilizing the Worldwide

Recognition of Automobile Designer Leepu

Research Report on

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Finding the Possibility of Creating a Local Car Brand for Middle Income Group Utilizing the Worldwide Recognition of

Automobile Designer Leepu

Submitted toMehedi HussainfacultyMarketing Research

Submitted byGroup: Resonance

Group Members: Mahbob Sadi Bhuiyan (ID#062 187 530)Rafat Mohamed (ID#062 453 030)

M. Ibrahim (ID#061 432 030)Muntasir Ahmed Zaman(ID#061 461 030)

Farzana Afroze Zerin (ID#052 515 030)

D a t e o f S u b m i s s i o n : 2 7 t h A u g u s t 2 0 0 9August 27, 2009

Mehedi Hussian

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Faculty

Marketing Research

North South University, Dhaka

Subject: Final report on “Finding the possibility of creating a local car brand for middle income group utilizing the worldwide recognition of automobile designer Leepu”

Dear Sir:

It is a great pleasure to present to you the final report on “Finding the possibility of creating a local car brand for middle income group utilizing the worldwide recognition of automobile designer Leepu” which we have diligently worked on during the entire spring semester.

We have gained a most interesting & informative experience while working for this report. Our efforts regarding learning about feasibility and acceptability of a local car brand have not only been fruitful, but it also has given us a new insight into the emergence undertaking similar kind of proposals or action plans. Incorporating vast amounts of information into a concise report was indeed a challenge for us. We earnestly hope that the report will meet the standards that you have set for us. We are always available for further query and clarification.

Sincerely,

Mahbob Sadi Bhuiyan ……... ………………………..

Rafat Mohamed ……………………………….. M. Ibrahim ………………………………..

Muntasir Ahmed Zaman ………………………………….

Farzana Afroze ZeriN ………………………………….

Table of Contents

1.0 INTRODUCTION……………………………………………………………...1

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1.1The Inception of an Automobile Assembly Plant…………………………2

1.2 Empowering People by bringing Economic Emancipation………………2

1.3 Innovation into Perspective………………………………………………….3

1.4 Contribution towards Social Progression………………………………….3

1.5 Ecological Perspective and Poverty Alleviation Opportunities…………..3

1.6 Uniqueness and Significance of the Study…………………………………...3

2.0 SUCCESS STORY………………………………………………………………..4

3.0 PROBLEM STATEMENT………………………………………………………...5

4.0 BIG RESEARCH QUESTION……………………………………………………5

4.1 Sub Questions…………………………………………………………………..6

5.0 OBJECTION…………………………………………………………………….…7

5.1 Broad Objective: ………………………………………………………….…..7

5.2 Specific Objectives:……………………………………………………………7

6.0 SCOPE

6.1 Source of Information:……………………………………………………….8

6.2 Types of Information:………………………………………………………...8

7.0 LIMITATIONS…………………………………………………….……………..8

8.0 METHODOLOGY…………………………………………………………………9

9.0 QUALITATIVE RESEARCH…………………………………………………….11

9.1 Literature Review: ……………………………………………………………..11

9.1.1 Specific Findings of the Secondary Research………………………………12

9.2 Qualitative Research Findings: ………………………………………………13

9.3 FGD with some Professionals Representing Middle Income Group……….16

10.0 CONCEPTUAL MODEL………………………………………………….…….17

11. 0 HYPOTHESES ………………………………………………………17

11.1 Hypotheses: Case, Variable and Types…………………….……17

12.0 QUANTITATIVE RESEARCH…………………………………..….22

12.1 Sampling Plan…………………………………………………….22

12.2 Sample Characteristics………………………………………….22

12.3 Survey Instrument……………………………………………….23

13.0 ANALYSIS/................................................................................25

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13.1 Reliability Analysis:………………………………………………..………….2513.2 Hypotheses Analysis………………………………………………………….26

14.0 FINDINGS AND RECOMMENDATIONS:……………………74

15.0 ACCEPTANCE MODEL………………………………………...75

16.0 CONCLUSION…………………………………………………….77

Appendix 1…………………………………………………………..78

Appendix 2…………………………………………………………..79

Appendix 3…………………………………………………………..82

Reference…………………………………………………………….85

1.0 INTRODUCTION

The essence of a brand new car, though being a commonly desired utility for almost all members

of the middle income group of Bangladesh, is still perceived as an extravagance for them. People

from this particular group do not typically possess the affordability of a brand new car which

makes them more skeptical towards the opportunity of experiencing the spirit of ownership when

they travel. In some cases, an individual or a family may have to sacrifice some of their basic

needs if they wish to avail their own car. The presently prevailing culture regarding mode of

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transportation for most of our population circles around hired auto-vehicles or three-wheelers –

automotive or human driven, public transportations and in a handful of situations self-owned

motorbikes. After a significant period of life dedicated to saving enough money to buy a self-

owned car, they cannot opt for a brand new car; rather almost invariably they are compelled to be

satisfied with a reconditioned vehicle, a car that has been used before. More than 90% of this

nominal portion of the country, having own car or a family car, run a reconditioned car. Even in

numerous instances, this minimal accomplishment is largely supported by assistance from

different financial institutions imposing huge interest burden on them.

1.1 The Inception of an Automobile Assembly Plant

This research looks into the applicability as well as acceptability of one of the possible solutions

addressing this insufficiency of the targeted middle income group. The research offers inception

of a local car brand assuming the establishment of a brand new industry of car assembling in this

country. As the title goes – “Identifying the acceptance of a local car brand for the middle

income group of Bangladesh”, it clearly defines the core issue, which is to find out the level of

acceptability of a probable local car brand to the targeted middle income group who currently

cannot meet the unbearable expense of acquiring a brand new car. While initiating the research,

the researchers came across Mr. Nizamuddin Awlia Leepu, a Bangladeshi automobile designer,

who has taken himself as well as the country to the international stage by acquiring a worldwide

recognition and global response for his brilliant ideas and fascinating designs. Therefore, this

research also incorporates finding the opportunities to utilize Leepu’s achievements relating with

the basic purpose of the research which is described above. Subsequent discussion on the theme

will elaborate on the contribution of the study towards economic emancipation of the people,

opportunities for innovation, social input, environmental protection, direct alleviation towards

poverty alleviation and academic innovation.

1.2 Empowering People by bringing Economic Emancipation

This paper deals with the issue of enabling the middle income group to purchase brand new

automobiles. It also aims to empower people by motivating them to avail a self-owned mode of

transportation which is also beneficial for them from an economic point of view. In most of the

cases, people of Bangladesh need to bear more than 120% extra of the original price of the car

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due to heavy taxation on car imports. The study considers price advantage of this new brand to

be one of the most influential factors behind its anticipated success as its price will not include

any kind of import duty at all which will enable the manufacturer to distribute cars at minimum

25% less price. This price advantage will be attributed not only to the immense prospect of

making people capable of purchasing brand new cars but also to generating a solution to address

their budget constraints to meet basic requirements of living which obviously summarizes the

potentiality of the project to generate economic freedom for the country people.

1.3 Innovation into Perspective

This research project is highly prospective towards bringing innovation into perspective to a

large extent. Being one of a kind, the commencement of an automobile assembly plant will open

up new horizon for the country with wide range of opportunities to innovate. The uniqueness of

the proposal is beyond any doubt. The industry can explore the technological field of automobile

designing. This project has enough prospects to be the innovative approach towards economic

progression of the country as it will ensure enormous savings in foreign currency reserve. In the

course of the implementation of the project we can arrange an innovative academic approach

towards exploration of automobile genius of this country who will be groomed and trained by

Leepu. Their involvement and contribution to this industry will noticeably bring positive

changes. This project is collectively a whole new package of innovation and implementation of a

project like this will encourage people to provide more novel initiatives bring further possible

illustrations.

1.4 Contribution towards Social Progression

A gigantic industry like automobile assembly plant will undoubtedly generate ample amount of

employment opportunities for both skilled and semi-skilled workforce which will positively

contribute to the social up gradation of the whole nation through alleviating poverty and crime.

Besides, as seen from the historical data of numerous instances, creation of a local car brand

results to gradual increase of duty on imported cars which subsequently sway the interest of the

customer base towards the local brand enhancing the uniformity of the society. For example, the

Iranian local car brand Sapa is almost invariably the only car driven by the whole nation. The

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successful establishment of the proposed industry will be followed by development in investment

from the foreign brands who will become interested to set up their own plant in that country

making the society progress consequently.

1.4 Ecological Perspective and Poverty Alleviation Opportunities

During the qualitative research the researchers conducted a key informant interview with

Nizamuddin Awlia Leepu, apparently who also has quite similar plans, the researchers

successfully revealed his intention to bring environmental cautions into consideration. He plans

to re-use the scrap materials taken from old damaged cars, which he has successfully done

before. He is also studying on minimum carbon diffusion mechanisms for an automobile

assembly plant and intends to apply those techniques if the proposed project is implemented.

These aspects of the project raise no question about the concern on environmental protection. As

stated earlier Leepu also has it in his mind that he will coordinate a professional training and

development program for abundant skilled and semi-skilled human resources dedicated to

automobile workshops in Bangladesh. This will profoundly be a large step towards poverty

alleviation as the learners will be directly selected by Leepu to work for the Industry. This will

be incorporated as an academic approach which is completely new and innovative and will

contribute to a large extent to the development of vocational training and education.

1.5 Uniqueness and Significance of the Study

The concept of “Peoples’ Car” established successfully in several countries has projected ample

opportunities for developing nations like Bangladesh. A number of developing nations are trying

to capitalize on the numerous opportunities that surround the inception of a local automobile

industry. With a handful of progressive role models in hand, Philippines, Uganda, Vietnam and

various other developing nations are extensively investing behind the establishment of this

industry. The success of Proton (Malaysia), Maruti (India) and several other instances has

contributed immensely towards their appearance as sound economies around the globe. Taking

Uganda as an example of developing nation like Bangladesh, this research has identified some

basic strategies undertaken by the Government of Uganda. They went into collaboration with

Geely Motors to establish a similar set up and also providing huge facilities in the form of 300

acres of free land, an initial investment of USD 10 Million, 10 years of tax holiday and a even a

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dedicated port only for this industry enabling people of Uganda to save a minimum of USD 5000

per car purchased (Almost 33% of price of an imported car). Moreover, as countries like India

and Malaysia are experiencing a overflow of automobile production compared to demand

(almost three times in some cases), many automobile manufacturers will be interested to invest

in a market like Bangladesh which has an annual demand of more than 10000 cars.

The discussion elaborates the significance of establishment of a automobile assembling plant in

Bangladesh which undeniably supports the issue raised through this research. A proper

utilization of available resources for the proposed industry is expected to contribute positively

towards further development of the nation in every possible aspects. This study will only cover

the identification of acceptance level of a local car brand among the targeted middle income

group which gives us the assurance about whether a local car brand will be successful to

penetrate the automobile market of this nation.

2.0 SUCCESS STORY

"I do to cars what the fairy Godmother did to Cinderella before she went to the ball. Only, none

of my vehicles will turn ugly again by midnight."

The 35-year old Bangladeshi car whiz replied to a BBC correspondent from the depths of his

garage while working on his Lamborghini. It is not every day that a Bangladeshi has a chance to

be “discovered” but one name that was showcased on Discovery Channel was Nizamuddin

Awlia Leepu. His unique designs were shown as well as appreciated at different auto shows

which took place all around the globe. Leepu had been working in automotive body design and

building technology since 1988, when he spent seven years in California as a car mechanic. He

came back to Bangladesh in 1998 and spent most of his time making new cars out of the bodies

of old ones, probably his own adaptation of Pimp My Ride, a popular western car show.

Leepu's fascination towards cars came about when he was a child and went to a car exhibition in

Saudi Arabia. The maverick instantly fell in love with a Ferrari. When he grew up to realize that

the price tag did not agree with his wallet, he told himself that he would some design himself a

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car just like a Ferrari. Unable to get the car out of his head, and unable to afford one, he learnt

the fine arts of automobile designs by himself. In 1989, he made the Leemo-bil, his own version

of his dream car the Lamborghini. He then went to create some look-a-likes of Ferraris. Car

lovers in Bangladesh soon got interested in his designs and whenever someone wanted unique

bodyworks to go over their dusty old car frame, everyone knew where to go to.

Finally Leepu has got some recognition for his distinctive car-making venture not from the

government; it came from a foreign TV channel. Discovery Channel proposed that he build two

unique cars within a timeframe. The proposed deadline was set at eight weeks. The whole

process was to be documented and aired on the Discovery Channel. Leepu got to work and the

end results were two beautiful sports cars. This whole herculean job was done to perfection by

him with a whole week to spare! Nevertheless, one has to give credit to Leepu for achieving

something that hardly anyone in the world has -- building two cars in seven weeks, a feat which

even shocked Bernie Fineman – the veteran in the auto trade for nearly half-a-century and who

has worked with Rolls Royce and Jaguar.

Over the years he got really good at it, but it eventually struck him that he didn't want to fake it

any more and that he "felt like a thief". He wanted to come up with his own designs, allowing his

creative juices to flow. Leepu has established a association between his designs and nature. For

Awila the end product isn't the most important thing. The actual creation of the piece itself, the

construction process that turns scrap into a thing of beauty, is the reward.

3.0 PROBLEM STATEMENT

The designs created by Leepu has worldwide acceptance; for the creation of a Bangladeshi

automobile brand targeted towards the middle income group, whether Leepu’s recognition can

accelerate the acceptability of the brand or not is unknown.

4.0 BIG RESEARCH QUESTION

Will Bangladeshi middle income level people purchase the car made in Bangladesh.

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4.1 Sub Questions

1. What are the driving factors that achieve this success

2. What type of car people are using right now.

3. To what extent affiliation of a foreign established automobile brand can enhance the

acceptance level of the local brand.

4. Will the upper middle and mid-middle income groups substitute their preferences from

more established foreign brands (Toyota) to a local brand.

5. Can a local brand capture the potential lower middle income market with a cheaper, due

to the tax advantage, yet reliable car.

5.0 OBJECTIVES

5.1 Broad Objective:

To evaluate the possibilities of Bangladeshi middle income level people will purchase the car

made in Bangladesh.

5.2 Specific Objectives:

1. To identify where a local car brand will stand competing with other established foreign

brands

2. To find out to what extent a local car brand can capture the potential lower income

market with the price advantage.

3. To find out to what extent a local car brand can capture the potential lower income

market with the price advantage.

6.0 SCOPE

The research tries to look into the initial stages of establishment of a local car brand and the

preferences of the target market. The research looks into how much will the designer’s design

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can effect the buying decision of the target market and the factors that are needed to consider

before designing a Bangladeshi Car Brand.

6.1 Source of Information:

1. Owners of Different Car Outlets in Dhaka

2. Middle Income group based in Dhaka

a. Public Service holder

b. Private Service holder

c. Self Employed

3. BARVIDA (Bangladesh Reconditioned Vehicles Importer’s & Distribution Association)

6.2 Types of Information:

1. Local brand acceptance.

2. Durability concerns

3. The extent of requirement of a stylish car

4. Features required

5. Priority features : price, feature, durability, style

6. Brand features

7. Concerns of the designer

7.0 LIMITATIONS

a. The research survey was conducted mainly on the people from Dhaka of required

income range. Buying preferences can be different for different for outside

Dhaka.

b. The research looks at initial preferences. Further research can take place in

creation of a brand image for the local brand.

8.0 METHODOLOGY

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This study assesses the utility of a local car brand to the middle income group of Bangladesh.

The research is cross sectional by nature. At the first phase qualitative research was undertaken.

This was covered through Secondary Literature Survey and Primary Qualitative Analysis. Two

car retailers were interviewed as one had the experience of dealing mostly with corporate clients

and the other having first hand experience of dealing directly with consumers. To assess the

utility of cars, initially identifying the underlying factors of utility that consumers seek from an

existing imported car is necessary. Thereby, matching with those features, additional different

features, which came out from a potential consumer FGD, were tested at different scenarios. The

FGD participants were of same age group but having different occupation. Thus varied

perception of consumers came into scenario. To assess all those factors and utilities, a structured

questionnaire was prepared to test the outcomes of the discussion. The questionnaire primarily

found out the need of a car to the respondent. Thereby assessing the validity of the respondents,

the utilities of a car is measured.

9.0 QUALITATIVE RESEARCH

9.1 Literature Review:

Literature on car assembly plants or even on cars is a rarity at a national level. However

Secondary data has been considered greatly from international publications.

1. Bangladesh Bank import payments: The import payments made for importing cars over

last 5 years.(Import payments Archive: (http://www.bangladesh-bank.org/)

2. Import tariff rates: Adjusted tariff rates on the import of different parts and raw materials

of automobile assembly of 2008. (Taxation Rate List: publication of National Board of

Revenue (NBR) 2008)

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3. Case study of Proton: the establishment of the factory of Proton, required investments

and backing of the government, human resource development.

4. Geographical movement of new assembly factories and eleven assembly factors being

established in India after 1990, when the government of the country focused on trade

liberalizations and helped the process of foreign collaborationPublic Car Program(PCP)

in Philippines where for basic car for the mass public with an under 1200 cc engine was

introduced with a price ceiling

5. Geely Collaboration with UGANDA: the Uganda government, the Chinese government

and the car manufacturing company GEELY came under an agreement of setting up a

assembly factory in Uganda which will make cars affordable at a range of US$ 10,000;

US$5000 less than any car available in the market. The government has given away 300

acre land to the company and also awarded a ten year tax holiday.

6. Case Study of SAPA: the Irani car brand, locally named as peigan, which after it’s

introduction has virtually entirely substituted its sedan car market of the country. Brand

collaborations in India: India-foreign collaboration have created car brands specifically

for Indian mass to make it more acceptable.e.g. Ford has created ford icon.

7. Vietnamese car market.( The Automobile Industry in Vietnam: Kenichi Ohno, Vietnam

Development Forum)

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9.1.1 Specific Findings of the Secondary Research

1. Assembly factories even enter market where they are producing more than the demand as

because the south asian markets with its potential of economic growth should increase its

market base in coming years. (Case of India)

2. Government needs to provide substantial support for the initial establishments and also in

accumulating funds. (Case of Proton)

3. Government has to provide tax benefits, tax holidays and decreased import taxes on raw

materials and heavily tax all imported vehicles. (Case of all assembly plants established

after 1990)

4. Taxation study of import tariff rates of car manufacturing sub units show that even if the

factory has to import all the major sub units such as the engine and the chasis from

outside, the car can still have a markup price of minimum 25% less than available cars of

the same engine power.

5. Bangladesh has an average light vehicle consumption of 10000 units and more making it

very eligible to have its own car assembly plant given the economic growth of the

country remains stable.

6. Country looses over US$300 million of annually for importing cars and an assembly

factory can work as the potential import substitution.

7. Creation of a niche market is possible for lower mid income group who currently cannot

afford a car because of high import taxes and avail public transport.

9.2 Qualitative Research Findings:

In the next phase the researchers conducted the primary qualitative research to identify the

fundamental aspects which are expected to affect the inception of an assembly plant in

Bangladesh. The findings from primary quail are elaborated below:

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Figure: The Benefits of Proton in Malaysia

Bangladeshi people have not yet experienced scientific aspects and technicalities (i.e.

Aerodynamics) of automobile manufacturing which is a major drawback. A

feasibility study needs to be undertaken as well.

According to manage required financial back up and land for the huge project will not

be less difficult than tackling the problems created surrounding the government

legislation. A professional and dedicated government body needs to be made

functional to monitor _______________.

The most vital factor will be that the car has to be economic if it targets the middle

income group.

The authenticity and uniqueness of a modified car will be one of the most convincing

features, ‘Wow Factor’ as quoted from Leepu, in case of a locally made car.

This industry has enough reasons to be called as a ‘risky venture; as there will be

questions raised regarding longevity, reliability and quality of a local brand , so these

aspects needs to be addressed most carefully.

Leepu feels the need of more automobile engineers which he believes needs to be

produced more. He agrees to train the skilled and semi-skilled manpower required for

the functioning of the industry.

The ultimate goal which Leepu considers to meet is to apply the concept of ‘People’s

Car’ tailored in a way so that it attracts the automobile customer base of Bangladesh.

9.3 FGD with some Professionals Representing Middle Income Group

A focused group discussion with some young professionals, who represent middle income group

provided the researchers adequate knowledge on the expectations from a local car brand. The

almost one hour long session was attended by Mr. Rubaiyat Hasan Siraz (MNC Executive), Mr.

Ruhul Amin (MNC Executive), Mr. Abhishik Paul (MNC Executive), Mr. Rubaiyyat Thakur

Robin (Entrepreneur), Mr. Shakib Ahmed (Private Service Holder), Mr. Asif Newaz

(Entrepreneur), Mr. Mostafizur Rahman (Private Service Holder) and Mr. Tarek Abdullah (MNC

Executive). Findings from the FGD are listed below:

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When asked about the fundamental aspects which they find most significant while

purchasing a car their response entailed-

o Price

o Brand

o Design

o Resell value

o Fuel Efficiency

o Engine Power

o Origin

o Serviceability

o Availability of Spare Parts

When asked about the preferred origin of a car most of them responded for Japanese and

European Cars.

Most of the discussants agreed that their purchasing decision might get influenced when a

local car is offered at 25% less price, although a few of them demanded further reduction

(up to 40%).

Most of the participants think price for a local car should not exceed BDT 6-7 lakh.

While asked for the required features the following came forward:

o Design

o Fuel Efficiency

o Built in CNG Engine

o Easy availability of Spares

o Price

o Serviceability

o Resell Value

The required engine power was 1500cc for the most and they expect the engine to run

more than 8 km/ltr.

Most of the participants were willing to pay a marked up price for servicing as for

originality but will not buy a local car if spares are costly.

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10.0 CONCEPTUAL MODEL

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Leepu’s Success

Establishment Local Car Brand

Expected Features

Acceptability of local brand

Lower incomeniche market

Pricing

Origin of the car DesignBrand Preference

Resell Value

Assurance of reliability Price

Middle Income Group

Transport Cost

Affordability range

Switch to local brand

Design acceptance

Buying decision changing ratio

Designing Local brand

Transport Preference

Feature Preference

Origin Preference

Design Preference

Modification Preference

Designer Effect

Income transport

Maintainability Preference DifferencesDSd

Brand Preference

Tax Advantage

Transport Cost

Pride Concerns

12.0 QUANTITATIVE RESEARCH

12.1 Sampling Plan

The research, at the quantitative analysis stage, utilized the non-probability sampling techniques.

The basic survey method was door-to-door. Convenience and Snowball sampling techniques

were used in this survey. The total duration of the survey was 3 days, starting from August 22,

2009 to August 25, 2008. The total number of respondents approached was 57, out of which 50

responded. All of the respondents are employed, either self or public/private. Each response was

recorded, on an average, in 5 minutes. To consider the sample to be an adequate representation

of the potential market, the sampling frame included respondents of each tire of middle income

group and each occupation.

12.2 Sample Characteristics

The sample respondents included around 15% female and 85% male. The modal age bracket was

28 – 37 years. Most of respondents were from Lower tire of the middle income group, who will

be the prime beneficial of a Bangladeshi People’s Car.

12.3 Survey Instrument

The survey questionnaire used as data collection instrument had in total 14 questions as well as

the respondent,s profile. At the initial stage, the respondents replied their existing transportation

scenario. Thereafter, the need of own car aroused and thus the respondents answered the next

questions considering their own need. All these questions were focused to find out the prime

utilities of a car and the impact on consumers of a local brand. A hypothetical scenario of price

factor was considered by the respondents and thus the research cross examined the perceived

utilities. The next section was only for the existing car owners to see whether they will switch to

the local brand. The survey questionnaire was ended by extracting some sensitive issues like

monthly income and age bracket.

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RECOMMENDATIONS:

1. There is positive small correlation between people’s necessity of having own car and

their income level

2. In terms of buying a new car, purchase decision is based upon (in descending order):

a. Price

b. Brand

c. Engine Power

d. Fuel Efficiency

e. Resell Value

f. Design

g. Origin

h. Serviceability

i. Availability of Spares

3. In terms of perception, Bangladeshi People prefer Japanese car most.

4. If a Bangladeshi Brand comes into the market, it has to be very much price competitive.

The respondents did not shift much from Japanese car even if the local one was running

on a Japanese Engine. When price reduction is done, then only the responses can be

shifted towards Bangladeshi Car

5. The respondents believe Bangladeshi Cars will not be better than Chinese Origin and will

at par with the Indian Ones.

6. Pride Concern regarding the use of a Local Car Brand is very high among the

respondents.

7. Some segments of the people would buy local car brand due to the fact that it helps the

national economy

8. The Prime Threat for a Bangladeshi Brand to be established is the Assurance of

Reliability. The other factors are listed in descending order:

a. Existing Brand Preference

b. Resell Value

c. Origin

d. Price

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9. For a sustainable Bangladeshi Brand of automobile the following factors are needed to be

considered according to the order:

a. Fuel Efficiency

b. Price

c. Availability of Spares

d. Built in CNG Engine

e. Serviceability

f. Design

g. Resell value

10. The expected engine power of a Bangladeshi car is 1500 cc

11. People having own car now, would like to buy a local brand as their second car instead of

replacing their existing imported one.

12. Most of the respondents believe that the government should impose higher taxes on car

imports in order to encourage the local car brand when it will be established.

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ACCEPTANCE MODEL

Figure: The Acceptance Model for Local Car Brand to the Middle Income Group of Bangladesh

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CONCLUSION

The country can get benefitted through the creation of a car brand and an assembly plant of its

own. The demands required can be met up by one assembly factory and it can be financially

feasible. The findings of the research include factors showing price to be the major determinant

factor of a buying decision over other features and it has to be considered with importance.

The model shows the inclination of the middle class group towards using a reliable car brand,

and price is the factor which only supersedes and brings it under acceptability terms. Also the

factors relating to pride concerns necessarily prove that nationalistic sentiments pervade within

the segment and the brand attribute of the car has to have these features under consideration. The

basic features demanded with a measurement of utility have been also shown attributing to the

basic buildup features of the car.

Although feasible, the actual establishment of a plant will need to look into factors of collecting

capital, training skilled human resource, designing and innovation and most importantly

government’s role under consideration. These aspects can individually be looked into in depth.

Considering the multiple socio-economic benefits Bangladesh can potentially receive from it

with the flip side of saving huge losses of foreign exchange each year used to importing cars,

Bangladesh should be walking towards creation of such an establishment.

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Appendix 1

Working Definition

Working Definition:

Middle Income Group

Middle Income group consists of three segments of income group.

Upper Middle: Individual earning a monthly income of BDT 100,000—200,000Mid-Middle: Individual earning a monthly income of BDT 60,000—100,000Lower-Middle: Individual earning a monthly income of BDT 20,000—60,000

Acceptability

The quantitative measurement of the number of people substituting their buying decisions

between a choice of imported cars and a local brand considering the given variables of new

pricing of cars.

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Appendix 2

Questionnaire

Q u e s t i o n n a i r e

Please Use [] Mark for the appropriate answer out of multiples * = Optional

01. Is your monthly income in the range of BDT 20,000/- to BDT 200,000/-?

YES NO

02. Please Rank the following means of transport by which you travel the most? [1=Most Frequently, 7=Least Frequently]

Rickshaw CNG Autorickshaw

Bus Non A/C Taxi

A/C Taxi

Motorcycle Family Car/Own Car

03. Being in your current status, you need to have your own/new car –

04. For your choice of a car please rank the following aspects according to your importance- [1=Most Important, 9=Least Important]

a. Designb. Engine Power

c. Origind. Pricee. Brandf. Serviceabilityg. Fuel Efficiencyh. Resell valuei. Availability of Spare Parts

05. In terms of your preference of Origin of a car, please rank the following regions according to your perceived reliability- [1=Most Preferred, 7=Least Preferred]

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Sl. No.

Strongly Disagree Disagree Indifferent Agree Strongly Agree

This Questionnaire is Prepared as a part of a Research to Identify the Level of Acceptance of a Local Car Brand to the Middle Income Group of Bangladesh. This research is undertaken by few students of North South University (NSU). All the information provided here will be extremely confidential and will be used for Academic Purpose (This Research) Only. We request your kind assistance and hope to get valid information. Thank

Japan China Korea/Malaysia India Bangladesh Europe America

06. If the Bangladeshi Car is running on a Japanese Engine which car you would prefer?

Bangladeshi Car Japanese Car It Depends Indifferent

07. Is using a car of your country a pride concern to you?

08. If you know that your country will be economically benefited if you buy a local car, will that affect your purchasing decision?

9. If you are buying a Bangladeshi Car, please rank the advantages you would look for- [1=Most Preferred, 7=Least Preferred]

DesignFuel

Efficiency

Built in CNG

Engine

Easy Availability of

SparesPrice Serviceability

Resell Value

10. What should be the ideal engine power of a local car brand?

1000 cc 1500 cc 1800 cc 2000 ccMore than 2000

cc

11. Considering the engine power you preferred in the last question, what should be the ideal fuel efficiency (with AC) for Leemobile?

Less than 5 km/liter

5 km/liter 6 km/liter 7 km/liter 8 km/liter 9 km/liter More than 9 km/liter

12. Would you like to see the government imposing higher taxes on car import if a local brand

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Strongly Disagree Disagree Indifferent Agree Strongly Agree

Strongly Disagree Disagree Indifferent Agree Strongly Agree

is established?

YES NO Indifferent

Please answer the following questions if you currently have your OWN car.

13. Would you like to sell your existing car to buy a new local car?

14. Would you like to buy a local car as your second car?

Respondent Profile:

15. Name*:

16. Gender: Male Female 38. Age: 17. 18.Occupation:

19. Your Average Monthly Income (in the range of): [In BDT]

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YES NO

YES NO

18-27 28-37 38-47 48-57 57+

Public Service Private Service Self Employed Unemployed

Less Than 20,000

20,000-59,999

60,000-99,999

100,000-149,999

More Than 150,000

REFERENCES

ASIAN AUTOMOTIVE NEWSLETTER Issue 45, December 2005

Bangladesh Bank (2005), Import payments Archive, http://www.bangladesh-bank.org/

CAR ASSEMBLY PLANT TO OPEN IN UGANDA, WHITAKER GROUP PUBLICATION

WINTER 2007-08, Uganda%20Update%20WIN%2007-08.pdf

Dato’ H.S.Z. Tahir (1992) Developing Human Capital at PROTON

Humphrey J. THE GLOBAL AUTOMOTIVE INDUSTRY VALUE CHAIN, Institute of

Development Studies, UNITED NATIONS INDUSTRIAL DEVELOPMENT

ORGANIZATION

Kenichi Ohno, The Automobile Industry in Vietnam, Vietnam Development Forum

National Board of Revenue (NBR) (2008), Taxation Rate List

Rafaelita A. Mercado-Aldaba, Micro Studies: Philippine Car Assembly Sector,

DISCUSSION PAPER SERIES NO. 97-21, September 1997

Yuri SADOI, Skill Formation in Malaysia: The Case of ·Auto Parts Industry, Southeast

Asian Studies, Vo1.36, No.3, December 1998

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