The government is yet to give the go-ahead for Pragati Industries Limited to assemble foreign sedans in Bangladesh even though the state-run automobile company had planned to begin by this December, according to company officials.

Earlier in May, Pragati reached a consensus with Mitsubishi Motors Corporation to establish a complete knock-down setup for assembling sedans of the Japanese automaker.

Then in July, the company announced its plans to initiate the new assembly line by the end of this year.

"We are working on the groundwork to start assembly but when we can actually begin depends on when we get final approval," said Md Moniruzzaman, chairman of the Bangladesh Steel and Engineering Corporation.

However, he assured that the delay would not derail their plans as Prime Minister Sheikh Hasina in her budget speech for fiscal 2023-24 declared that local assembly of sedans should start soon.

For about a decade now, Pragati has been seeking approval to assemble Mitsubishi sedans with engine capacities of 1.2cc to 1.6cc to make the cars more affordable for local consumers, he said.

Md Abul Kalam Azad, managing director of Pragati, previously told The Daily Star that whether it be a Japanese or Korean brand, they would start assembling foreign sedans by December.

He had also informed that they were already engaged in discussions to this end.

The annual demand for sedans in Bangladesh currently stands at about 16,000 units, according to data of the Bangladesh Road Transport Authority.

Of the total demand, around 83 percent is met through reconditioned car imports from Japan.

This is because at present, only PHP Group, Fair Technology Group and Pragati Industries are engaged in local assembly, industry people said.

But at least three foreign brands, including Kia, are in the pipeline to start assembling their cars in Bangladesh as local customers are now preferring brand new units over reconditioned ones, they added.

Meanwhile, Bangladesh Auto Industries Limited, which has a manufacturing unit at the Bangabandhu Sheikh Mujib Shilpa Nagar in Chattogram, is all set to market its locally made electric vehicles.

The company aims to introduce "Made in Bangladesh" electric vehicles, including motorcycles, three-wheelers, sedans, hatchbacks, and sport utility vehicles, by July next year.

Sources at Pragati Industries said they prepared a detailed plan for assembling Mitsubishi sedans and sent it to the Prime Minister's Office for approval.

Besides, the plan was shared with Mitsubishi so they can take the necessary steps for technical cooperation, with local assembly expected to reduce the price of brand-new cars by at least Tk 5 lakh per unit, they added.

Pragati currently assembles sport utility vehicles, such as the Pajero Sport, active sport crossovers, and double-cabin pickups of the Japanese brand as well as buses designed by India's Tata.

In March, Prime Minister Sheikh Hasina urged for using cars manufactured by Pragati instead of imported vehicles for development projects considering the current economic situation.

Mitsubishi has been outsourcing its production activities in Bangladesh to Pragati, a concern of the Bangladesh Steel and Engineering Corporation, since 1966.

The company sold only 177 vehicles in the last fiscal year whereas 711 units were sold the year prior.

During a visit to Bangladesh in May 2019, Ryujiro Kobashi, vice-president of Mitsubishi, disclosed they would invest in the country to produce their branded vehicles.

Kobashi sought policy support from the government to this end.