KATHMANDU, Aug 26: Government's unclear and inconsistent policies, high tariff on imports and perception that automobiles are luxury goods have hindered the growth of auto market in the country, according to auto dealers.
Speaking at a roundtable meeting organized by Nepal Republic Media (NRM) on Sunday, they said that the growth of automobile sales has fallen to 1.5 percent from an average growth rate of 20 to 25 percent in previous years.
They also called for the lowering of the tariffs on the imports of automobiles.
Anjan Shrestha, the immediate past president of National Automobiles Association of Nepal (NADA), said that they were worried with the slow growth of automobile business in Nepal despite an increase in the purchasing capacity of people by 16 percent.
‘Private transport is not a luxury sector’
"The slowdown in the growth of automobile business is not a positive thing," said Shrestha, attributing the slow growth to rising tariffs on imports of vehicles and tightening of credit flow to the auto sector.
"The government has imposed a tariff of 255 to 320 percent on the import of automobiles in the country. People should be able to ride a car based on their capacity. The high tariff rate is curbing the rights of the people to ride a car," he said. He also warned that the government's measures to curb import of auto vehicles could hit the revenue collection target for the current fiscal year.
Krishna Prasad Dulal, acting president of NADA, said that the failure of the government to expand the road network and build infrastructure was also a constraint to the growth of auto business in the country.
"There are complaints that there are a lot of vehicles on the road, causing traffic congestion. But it's not the case. It's not that there are many vehicles, but there are fewer and smaller roads in the country," he said. "Even the budget allocated for the construction of roads gets under-spent," he added.
The government gets nearly Rs 100 billion in revenue from the auto sector every year.
NADA representatives also said that the recent rules introduced by the government to make permanent account number mandatory, online-based vehicle and consignment tracking system and mandatory enrollment in the social security fund scheme was making it difficult for doing business in the country.
NADA is hosting the "NADA Auto Show-2019" from Tuesday (August 27). Nirakar Shrestha, the NADA Auto Show's Coordinator, said that the annual mega auto show of the country which is 19th in the series will feature 95 stalls related to four-wheeler, two-wheeler, lubricants, spare parts, batteries, banks and insurance companies.
The organizers said that they expected over 75,000 visitors in the NADA Auto Show this time.
