Pair Group to Establish Assembly Plant in Bangladesh with Hyundai Motor Company

[Asia Economy Reporter Suyeon Woo] Bangladeshi conglomerate Fair Group is partnering with Hyundai Motor Company to establish an assembly plant locally. This move aims to actively enter the Bangladeshi market, which has a large population and a rapidly growing middle class, and to increase market share in Southeast Asia.

According to foreign media, on the 6th, Fair Group, Hyundai Motor's distribution partner, signed a land contract with the Bangladesh Hi-Tech Park Authority (BHTPA) for the establishment of an assembly plant. The plant is planned to be built on a 24,281㎡ (approximately 7,300 pyeong) site in the Kaliakair area of Gazipur, Bangladesh. Fair Group will invest in the project, while Hyundai Motor will provide technical support and export parts.

Last July, Hyundai Motor signed a contract with Fair Group for exclusive local distribution and the establishment of an assembly plant, aiming to complete the plant by the end of this year. Following approval from the Bangladeshi authorities, the plant establishment process is expected to accelerate.

Until now, Hyundai Motor has entered the Bangladeshi market by exporting finished vehicles or parts produced at its Indian plant through local agents. With the establishment of this assembly plant, Hyundai Motor is expected to change its supply method by exporting vehicles in parts form and assembling finished vehicles locally using locally sourced parts.

Hyundai Motor operates a CKD (Completely Knocked Down) plant in Vietnam with an annual capacity of 60,000 units and is currently promoting the establishment of a CKD plant in Kazakhstan with an annual capacity of 30,000 units. As governments in various countries adopt policies to protect domestic industries and create jobs by lowering tariffs on parts and raising tariffs on finished vehicles, entry into emerging markets through the CKD method is increasing. The establishment of this plant also reflects the proactive will of the Bangladeshi government.

The Bangladeshi automobile market, with an annual volume of 30,000 units, is mostly dominated by Japanese and Indian brands, with a higher proportion of used car sales than new cars. Fair Group, together with Hyundai Motor, has set a goal to establish its own production capacity through the assembly plant and increase its market share in the Bangladeshi automobile market to 50% within the next 3 to 4 years.

This content was produced with the assistance of AI translation services.