KATHMANDU, May 10: Hyundai, a Korean company, has initiated vehicle production in Nepal with the opening of a new assembly plant in Nawalparasi, operated by Laxmi Group, the official dealer for Hyundai in the country. 

The plant was inaugurated by Prime Minister Pushpa Kamal Dahal. With this, Hyundai becomes the sole assembler of four-wheelers in the country with the Hyundai Venue being manufactured locally.

Previously, Hulas Motors had manufactured vehicles in Nepal, but ceased operations due to pollution concerns. Although several two-wheeler assembly plants have since started, Hyundai's initiative is the first for four-wheelers. 

The government has supported this industry by offering substantial tax breaks on the assembly of vehicles, including reductions in customs duties, excise taxes, and income tax for assembled cars. 

Additionally, discussions have been held with Korean Ambassador Park Tae Young and Finance Minister Barsha Man Pun to address issues like double taxation and investment protection to facilitate further growth in vehicle manufacturing in Nepal.

The Hyundai assembly plant, spanning 10 bighas in Ramgram Municipality-13, Nawalparasi, has been equipped with tools and technology worth over Rs 1.5 billion. Initially projected to be a Rs 5.01 billion investment four years ago by Laxmi Intercontinental Pvt Ltd, the plant is now operational. Deepak Thapaliya, the general manager, said that the facility would employ approximately 200 people and the current production stands at 5,000 units per shift.