Economic feasibility analysis of manufacturing car bumper-a Case of automobile industries in Bangladesh

Abstract

Automobile after sales spare parts demand increased with the increase of vehicles in Bangladesh. Along with the socio-economic development, use of motor vehicle trend is going upward. Most of the spare parts demand is met by import as the manufacturing facility of this sector is absent in the country. In this study, it has been found that the average motor vehicle registration is increasing yearly by 20% and the spare parts import also increased proportionately to meet the after sales demand.Some company involved in the automobile assembling units. Presently, there is no well-organized and quality manufacturer of parts and components of the automobile in Bangladesh. Some low-quality indigenous manufacturing of parts and components are there but they are carried out against specific order to meet the emergency requirement. There is no mass production to meet the requirements.Among the different parts, the front bumper is the most damaged part of a vehicle.In Bangladesh, there are around 55,000 bumpers imported in 2017. Very little information has been found regarding the bumper manufacture in Bangladesh.This study mainly focuses on exploring the economic feasibility of establishing an automobile bumper manufacturing industry in Bangladesh. The result of the analysis found positive with NPV greater than 0; IRR above 29%; Payback Period 2 Years 6.7 Months. The industry can also come into a benefit for creating employment and reducing import dependency in Bangladesh.