Rancon, Mitsubishi form JV to make vehicles in Bangladesh
Rancon Auto Industries Ltd (RAIL) has entered a strategic partnership with Japan’s Mitsubishi Corporation to manufacture vehicles in Bangladesh for sale in domestic and regional markets.
Under the agreement, Mitsubishi will take a 25 percent equity stake in RAIL, which began local production of the Mitsubishi Xpander in June last year.
For all latest news, follow The Daily Star's Google News channel. Announcing the joint venture at an event at Sheraton Dhaka today, Rancon Holdings Group Managing Director Romo Rouf Chowdhury said the partnership would mark a major step forward for the country’s automotive sector.
“This partnership between Mitsubishi Corporation and Rancon will play a pivotal role in advancing Bangladesh’s automotive industry by integrating global expertise with deep local market insights. This landmark strategic alliance -- the first of its kind in the country’s automotive sector -- underscores the strength of Bangladesh-Japan trade relations,” he said.
He added that the strategic investment is expected to enhance access to affordable and convenient vehicle financing, expand after-sales services, ensure spare parts availability, and strengthen distribution networks across the country.
“It will also facilitate the transfer of technology and knowledge to develop a highly skilled local workforce, while contributing to government revenue through VAT and taxes,” said Chowdhury, adding the company’s automobile arm has gradually built its manufacturing base since starting operations in 2017.
RAIL, which focuses on multi-brand vehicle manufacturing and assembly, began with the local assembly of the Mitsubishi Outlander. It later expanded its portfolio to include the Fuso BM117, Mercedes OF1623, Proton X70, as well as trucks and pickups from JAC and GMC.
The company upgraded its factory in 2023 with a modern paint facility. The following year, it launched the locally painted and assembled Mitsubishi Xpander, which quickly gained traction, with monthly sales exceeding 100 units, making it the highest-selling brand-new vehicle in Bangladesh.
Despite this growth, Chowdhury said the country’s automobile market remains largely underdeveloped.
With one of the lowest per capita vehicle ownership rates in the region and a population of around 200 million, he said Bangladesh offers strong long-term demand potential as the middle class expands.
Against this backdrop, Rancon initiated discussions with Mitsubishi Corporation to leverage its manufacturing and distribution expertise. The talks culminated in the joint venture, under which Mitsubishi Corporation acquired a 25 percent stake in Rancon Automobile Industries through foreign direct investment.
“This is a proud moment for us,” Chowdhury said, adding that the partnership reflects growing international confidence in Bangladesh’s industrial prospects.
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