Automobile business sees substantial growth
Kathmandu, November 13
Vehicles and spare parts worth Rs 25.4 billion were imported in Nepal in the first three months of fiscal year 2016-17 (mid-July to mid-October), due to the boom in the country’s automobile business lately.
Following major setbacks like the earthquake and the border-blockade last year, only Rs 10 billion worth of vehicles and spare parts were imported in the country during the same period of fiscal year 2015-16, as per the statistics of the Department of Customs (DoC).
Auto dealers have termed the current growth in the automobile market as exceptional and encouraging. “Such a growth in vehicle business and auto industry has encouraged dealers a lot. In terms of growth, the vehicle business till mid-October this year has crossed the 60 per cent mark,” said Shekhar Golchha, former president of Nepal Automobile Dealers Association (NADA) — the umbrella body of automobile dealers in the country.
According to dealers, the automobile industry which was stagnant about five years back has been growing at an annual pace of 30 per cent these years, with fiscal 2015-16 an exception as the growth rate fell below 15 per cent due to the earthquake and border-blockade.
Dealers have attributed the improving purchasing capacity of Nepali people, opening of new roads across the country, easy finance and exchange facilities for automobiles, among others as reasons behind this substantial growth of the automobile industry. “The standard of Nepali people has been improving in recent years and so has their purchasing capacity,” said Golchha, adding that banks and financial institutions have been offering auto loans at lucrative interest rates luring people towards automobiles.
Banks and financial institutions are offering auto loans at as less as six per cent, according to dealers. They say that auto brands have also been able to grab the confidence of customers by opening service centres and spare parts outlets across the country.
Encouraging sales during the festive season and NADA Auto Show 2016 in September have also contributed to the growth of the auto market, automobile dealers say.
NADA President Anjan Shrestha believes that the craze for entry-level hatchbacks from different automobile brands has pushed up auto business. Brands like Datsun and Renault have introduced entry-level hatchbacks with a price range starting from Rs 1.4 million. “Around 60 per cent contribution to the current growth in automobile business is from the sales of entry-level hatchbacks,” he said. Shrestha is the managing director of Laxmi Intercontinental — the authorised distributor of Hyundai vehicles for Nepal.