According to the Nepal Rastra Bank’s (NRB) announcement on November 09, 2018, the authority has decreased the loan-to-value-ratio to 50 percent from the current 65 percent. Following this, automobile purchasers will pay Rs 1.5 million down-payment, if a car’s value is Rs 3 million.

The Central Bank took this decision in a bid to control the increasing import of vehicles, specially luxury vehicles, over the last few years.

“Data shows that vehicle import is growing at an alarming rate which is not good for the economy even though the automobile sector is a major revenue contributor to the government,” said Narayan Prasad Poudel, NRB Spokesperson.

Similarly, the Central Bank’s decision of controlling automobile financing also seeks to address its credit crunch which causes a major chunk of its revenue to go abroad.

According to government statistics, in the last eight years the number of vehicles in Nepal has doubled to 3.2 million!

Besides customers, NRB’s decision is also likely to hit private vehicles’ sale as dealers say that more than 60 percent vehicles in the market are sold through financing.

“As high taxes have made vehicles costlier in Nepal, people seek financing from banks and financial institutions while purchasing vehicles. However, squeezing auto financing will certainly discourage potential buyers,” said Saurabh Jyoti, Chairman, Syakar Trading Company and former Nepal Automobile Dealers’ Association President.

Jyoti  said that the automobile industry was not unproductive for lending as the it contributed to 20 percent of the total government revenue collected every year. He also adds that no economy can grow by attempting to squeeze the automobile industry.

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Organized in collaboration by the Nepal’s Automobile Dealers’ Association (NADA) and Global Exposition & Management Services, the six-day expo showcased some of the latest entrants in the two-wheeler and four-wheeler market.

The event showcased the best of 20 two-wheeler brands and 19 four-wheelers brands.

The event saw the participation of over 70 importers, dealers, distributors and manufacturers from Nepal’s automobile industry, accounting to 135 stalls and 65,000 visitors in all.

However, NADA 2018 missed the grandeur of heavy commercial vehicles due to space constraints.

Highlights of the Event:
Surprisingly, the event witnessed a significant number of queries for Electric Vehicles (EVs). The demand for EVs is on the rise in Nepal’s automobile industry, following which, companies have been introducing these automobiles in the two-wheeler sector.

However, this trend is facing a challenge in terms of infrastructure, says NADA Vice-President Krishna Prasad Dulal.

“We have made suggestions to the government for the development of infrastructure for EVs. The government needs to install charging stations at different places to promote EVs,” adds Dulal.

Another highlight of the event was the high number of transactions on bookings of low-cost vehicles. The expo recorded an account of Rs 5 billion transactions.

As per organizers, automobile companies made up to 30 percent of their annual sales in the expo itself. Special schemes and offers, new launches, availability of accessories and financial assistance were identified among the key reasons for enhanced sales during the expo.

Conclusion:
The 13^th NADA Auto Show presented the likes of leading automobile brands including Tata Motors, Toyota, Skoda, Hyundai, Renault, Nissan and Royal Enfield.

Nepal has been witnessing a steady rise in the purchase of automobiles over the years. According to recent reports, the country’s automobile industry recorded a registration of 437,614 vehicles in the last fiscal.

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Easy financial aid and low-interest rate for an automobile purchase, besides necessity, are the driving factors that contributed to this scenario.

“Automobiles are today a necessity and are no more luxurious goods. Vehicle import is bound to increase in the future owing to its increasing necessity among people,” said Shambhu Dahal, President, Nepal Automobiles Dealers’ Association (NADA).

 

“As the price of high-end automobiles has skyrocketed owing to increased tax rates, the demand for such luxurious vehicles has come down notably,” stated Dahal.

The below-conducted statistics show the growth and development in the Nepal automobile industry.

Vehicle Registration Statistics:
According to the Nepal Department of Transport Management (DoTM) statistics published on August 16, 2018, the following findings were revealed:

• 437,614 vehicles were registered in Nepal, in the last fiscal year. This increased the total number of vehicles in the country to 3.22 million, since 1990
• Half of the total registered vehicles in Nepal were imported in the last five years
• Out of the total registered vehicles so far, 2.5 million alone are motorbikes
• DoTM reports registration statistics for 49,318 buses, 25,595 minibuses/mini trucks, 90,411 cranes/dozers, 55,973 pick-up vans, 7,658 microbuses, 45,672 tempos, 143,962 tractors/power, 237,658 cars/jeeps/vans and 26,466 e-rickshaws and 7,607 other vehicles

However, the automobile business came down drastically, ever since the government increased vehicles and moreover high-end vehicles taxes since the Fiscal Year 2018-19 began.

Also Read:

• Nepal To Get India’s First Made-In-India EV
• Leading Auto Giant Announces EVs In Nepal
• Tootle App: Public Transportation Goes Digital in Nepal

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