Loss-making Atlas looks for new business opportunities to sustain

Atlas Bangladesh Limited, a loss-making state-owned motorcycle manufacturing and assembling company, plans to turn around its business through diversification.

While the industry experts are doubtful of its survival in the domestic market, Atlas, however, vows to make a comeback with its new mission.

“We plan to re-establish our business and increase our brand value in the market. In this regard, we are considering some strategic changes in the two-wheeler industry,” Atlas Managing Director Abdul Malek Morol told The Business Post.

“We are mainly a motorcycle assembling company, but are planning to manufacture the mechanical parts of motorcycles ourselves to ensure more profit and create a separate brand entity.”

In the long run, Malek said the company wants to launch its own motorcycle chain, which will increase profit margin.

At the same time, it is trying to forge new business deals and joint ventures with renowned global organisations, which will ensure sustainability.

“We are also planning to venture into relatively new and diversified market offerings to ensure our profit margin while re-establishing our two-wheeler business,” said the Atlas managing director.

Addressing a question regarding the massive losses the company has been facing over the last couple of years, Abdul Malek Morol blamed the economic meltdown the domestic and global market faced amid the Covid-19 pandemic.

“Not only Atlas, but most companies in the two-wheeler industry faced similar losses. The sales have plunged during these last two years, but we are slowly making a comeback in the market.”

As the Covid-19 restriction eased, the company showed an increase in sales, indicating a steep recovery during October and December in the current fiscal year, he continued, saying that in this period, its sales increased to over 528 per cent to worth Tk 4.91 crore while financial losses reduced to about 61 per cent to Tk 1.91 crore.

The company sources said they had been facing a gradual decline in sales after terminating “corporate partnership” with Hero MotoCorp nine years ago in 2013 and been facing losses since.

In 2016, ABL, however, entered into a contract with the Chongqing Zongshen Power Machinery Co. Ltd., one of the top five two-wheeler manufacturers in China, in a joint venture to import, assemble, and market their motorcycles.

However, the Chinese company could not attract consumers with their motorcycles in the
domestic market.

Failing to recoup their losses with the help of Chongqing Zongshen, Atlas started a new journey with TVS Auto Bangladesh Limited as a “corporate partner” since May 24, 2018, with an aim to grow their business and create an optimum
brand value.

The company failed to increase its annual motorcycle sales sufficiently.

In Fiscal Year 2015-16, Atlas posted a net loss, which had never been witnessed before by the new generation of shareholders.

Analysts concluded that the partnership with Zongshen had backfired as the company began losing money the same year it started selling the Chinese motorcycles.

In Bangladesh, the two-wheeler market is significantly dominated by Indian-made products, no matter where the brand originates from.

In May 2018, Atlas signed a contract with TVS Auto Bangladesh Ltd, a subsidiary of Indian two-wheeler manufacturer TVS Auto, to explore opportunities with a better product.

As per the contract, Atlas BD would buy motorcycle parts from TVS and then assemble them for selling to institutions.