Golchha Organisation has started assembling Indian two-wheeler Bajaj Discover 125 at its assembly plant located in Nawalparasi district. The company’s assembly unit manufactures up to 30 Bajaj Discover 125 motorcycles per day and these assembled motorbikes have already been rolled out in the domestic market.Though vehicle assembling is believed to strengthen country’s automobile industry, a few other companies who had earlier started automobile assembly units could not sustain due to various reasons. The first assembly plant that was started in Nepal was about a decade back to manufacture Anna Lifan motorcycles. However, it could not sustain and was shut down.  In this regard, Sujan Dhungana of The Himalayan Times caught up with Shekhar Golchha, managing director of Golchha Organisation, to know about the new vehicle assembly plant and the prospects and challenges of such assembly plants in the country. Excerpts:

Golchha Organisation has finally started its vehicle assembly plant in the country. How is the assembling process going on?

We are delighted that our vehicle assembly plant, which was planned long before, has finally started operations. Now it has been almost three months that our vehicle assembly unit has started assembling two-wheelers. As we are in the initial phase of two-wheeler assembling, we have been assembling only Bajaj Discover 125 of India in the first phase. Moreover, these assembled motorbikes have already been made available in the domestic market. Our assembly plant has been producing 25 to 30 units of Bajaj Discover 125 motorbikes at present. Now it is time for us to get feedback and know what the customers feel about these Nepal-assembled motorbikes. We are optimistic that people will love our products and encourage us to expand our business in future.

What about the investment part of the vehicle assembly unit and the employment opportunity that it has created?

Automobile assembling is a costly business. We have injected a sum of almost Rs 700 million in the assembly unit so far. However, the investment process is still going on. Regarding the job creation part, we have currently employed 70 people including a group of engineers. As I mentioned earlier that currently we are in the initial phase of our assembling business, hence we have not been able to employ many people. However, with different expansion plans in the offing, we will give jobs to at least 200 local people in the near future. If the country is able to promote vehicle assembly industry, the sector will certainly create thousands of new jobs and contribute to reducing the rate of unemployment, which is one of the major setbacks to the development process in Nepal.

It is not the first time that a company has started vehicle assembling in the country. However, a few of those that started could not sustain. What do you have to say in this regard?

Starting a vehicle assembly unit is a challenging business and it is far more challenging in countries like Nepal where the policies are unclear and the automobile assembling industry has low government priority. In fact, domestic producers do not have any additional advantages in the country as the government treats domestic products and foreign imports on an equal footing. If the government does not give priority to the country’s production industry and additional benefits to domestic products, our products cannot compete with imported goods and the domestic production sector will always remain backward. It is because of the lack of government’s priority and support that auto assembly plants in the past could not sustain and our assembly unit is also certain to face similar challenges. The first thing that is required to help boost vehicle assembly units in Nepal is a change in government’s vision towards such industry. The government in Nepal is more revenue-oriented. It might be a probable cause that vehicle assembling industry is not in government’s priority as it thinks that promoting such industries in the country will affect its revenue. This notion is false. Broadly, the government should think that vehicle assembling industry will automatically promote other ancillary industries. Once we start assembling vehicles, other industries related to tyres, lubricants and other spare parts will automatically be set up ensuring more job opportunities and revenue to the government.

What about the cost of these domestically assembled two-wheelers?

It is true that domestically manufactured products should be cheaper as compared to foreign brands. However, this is possible only if the government keeps domestic production sector under priority. The current policies of the government are not supportive to the country’s production sector. We can take an example of the country’s automobile industry where the government has been imposing same customs duty on imported motorbikes and their spare parts. Similarly, there is not much difference in other taxes being imposed by the government in Nepal on finished vehicles and spare parts. In such a scenario, though vehicles are assembled in the country, they will not be cheaper. In a bid to make vehicles assembled in the country cheaper, the government should provide subsidy facility to vehicle assembly plants on spare parts rather than treating spare parts and finished goods equally in terms of tax. Without support from the government in terms of taxes, the assembling industry will not be able to survive in Nepal. We have set up the assembly plant with the sole aim to offer domestically value added products to Nepali customers. Thus, government policies should be supportive to vehicle assembly industry and any other form of industry. The government should support the vehicle assembly industry keeping in mind the benefits that could be generated from different other ancillary industries which will be established after vehicle assembly industry is set up.

What are your future plans associated with the recently established vehicle assembly factory? How will it affect the overall business of Bajaj?

As mentioned earlier, we will gradually start assembling different other two-wheeler brands that our organisation has been dealing with currently. After receiving feedback from the customers, we will slowly expand and localise the assembling in Nawalparasi and try creating more employment opportunities. At the moment we have started slowly but we plan to assemble two-wheelers aggressively following government support to such industry and customer feedback. More than just assembling vehicles, it is important to make the products that we manufacture customer-friendly. Meanwhile, we are optimistic the new assembly unit will certainly add to the business of Bajaj two-wheelers. Bajaj is a customer-friendly two-wheeler brand and this is an advantage that ensures the success of our vehicle assembly unit.