Motrex to set up 4-wheeler assembling plant in Nepal

Following three rounds of negotiations, Investment Board of Nepal (IBN) has finally signed an initial agreement with Motrex Co Ltd for an investment worth $105 million – approximately Rs 11.95 billion at Wednesday's exchange rate – for setting up a plant in Nepal to assemble four-wheeler vehicles in the country.
The board and the South Korean company were holding negotiations for nearly nine months, after the board approved proposal in mid-March, according to the chief executive officer (CEO) of the board Maha Prasad Adhikari. “The board has finalised the project investment agreement with Motrex, subject to approval from their respective boards,” he said, adding that the agreement will pave the way for the South Korean company to set up the four-wheeler assembling plant in Nepal. “The company plans to manufacture four-wheelers in Nepal in the long-run.”
The South Korean company is mainly engaged in manufacturing and distribution of automotive parts. “Its products include audio-visual navigation (AVN), audio video (AV), around view monitor, head up display and rear seat entertainment (RSE),” according to the company.
Under the project, the company will import vehicle parts and assemble in Nepal. “The company has a target to assemble 1,000 four-wheelers in the first year of operation,” according to its proposal. “The environmental impact assessment and plant set up will take nearly three years.”
However, the Korean company was seeking infant industry protection for seven years to block any competitor for certain period of time. The auto dealers in Nepal are opposed to the condition of restricting entry of competitors.
“We have convinced Motrex that market competition was in their interest,” Adhikari said, adding that the company agreed to drop the condition. “The board has turned down the company's demand for entry restriction of competitors investing below Rs 10 billion.”
The board has way-out for most of other conditions too.
According to the board, the company has been seeking 10 per cent to 15 per cent waiver on the import and excise duties of equipment, machinery or any other parts needed for the assembling of four-wheelers in Nepal.
Though the board is positive towards providing waiver on the import of certain equipment, machinery or parts, the tax break has to be addressed through a separate act, according to the board. “The board has also urged the South Korean company to use at least 30 per cent of local materials in its assembled products, after a certain period of time.”

NADA Auto Show 2019 concludes

The 14th edition of NADA Auto Show concluded here today.
According to the organizer – Nepal Automobiles Dealers Association (NADA) – the six-day event attracted over 81,000 visitors, which was more than the projected 75,000 visitors. “Last year, the auto show had recorded 65,000 foot falls,” according to the spokesperson for the NADA Anup Kumar Baral.
The auto show has given automobiles business, which was seeing some signs of slowdown recently, a shot in the arm, he said, adding that – unlike previous years – NADA did not make public the sales and bookings figures this year. “We did not collect bookings and sales data from participating companies this year.”
Baral, who is also the secretary of the NADA, said that the auto show, which is organised ahead of Dashain-Tihar festival, is a festive event for automobiles and accessories dealer as majority of annual sales is done during the event.
Automobile brands like Mahindra, Tata, Vespa, TVS, Toyota, Datsun, Bajaj, and Suzuki, among others, participated in the 14th edition of NADA auto show, where banks including Civil Bank and Standard Chartered Bank Nepal had also set up stalls for easy auto loan.

Nada auto show next week

Nada Automobiles Association of Nepal is organising the 14th edition of its flagship automotive exhibition Nada Auto Show 2019.
The show scheduled for August 27 till September 1 this year will cover a larger area of Bhrikuti Mandap that includes ground, garden and hall for exhibiting purpose, according to the organiser. Managed by Global Exposition & Management Services, the exhibition is once again title sponsored by Servo world class lubricant.
Servo presents Nada Auto Show 2019 is expected to be an overwhelming participative business platform for customers, auto enthusiasts, auto dealers and other auto stakeholders at large, the organiser claimed, adding that year after year Nada Auto Show has been witnessing increasing number of exhibitors as well as soaring foot fall that may help to portray automobile a need and a medium of economic activity rather than only luxury.
Servo presents Nada Auto Show 2019 is also an informative platform that incorporates information on financing services, after sales services, insurance services, it added. “A common media desk will be set up at the venue to facilitate media personnel.”
The show is equally an ideal and trustworthy platform for the prospective buyers to know, observe and inquire about their choices to make smart decisions. As always road safety and traffic rules are important areas of focus in regard to disseminating mass information. “For this purpose, the exhibition will have Traffic Information Desk at the venue in support with Metropolitan Traffic Police Division,” it said, adding that this edition of the exhibition will showcase 23 brands from 4-wheeler section and 19 brands from 2-wheeler section, 12 brands of lubricants, 9 brands of tyre, 5 brands of battery, 14 other garage equipment and auto components along with 13 financial institutions. “All together 95 exhibitors comprising importers, dealers, distributors and manufacturers will be accommodated in around 160 small and big stalls.”
The organiser has also created separated sections – allowing visitors’ convenience – including 2-wheeler section, 4-wheeler section, auto component section and financial institution section.
Servo presents Nada Auto Show 2019 – a highly awaited event – also expects to draw around 75,000 visitors in six days.

१८ लाख नेपाली चढ्छन् मोटरसाइकल

हाल नेपालमा १८ लाख ३५ हजार २८ जना मोटरसाइकल चढ्छन्। यातायात व्यवस्था विभागको तथ्यांक अनुसार नेपालमा दर्ता रहेका कुल सवारी साधनमध्ये १८ लाख ३५ हजार २८ त मोटरसाइकल रहेका छन्। पछिल्लो समय विविध कारणले नेपालमा दुईपांग्रे सवारी साधन विशेषतः मोटरसाइकलको माग अत्यधिक बढेको कारण मोटरसाइकलको दर्ता गत आवमा मात्रै २ लाख ६७ हजार ४ सय ३९ पुगेको विभागले जनाएको छ। विभागका अनुसार वाग्मति अञ्चलमा मात्र गत आवमा ६४ हजार ९ सय २७ मोटरसाइकल दर्ता भएको छ।
तर, नेपालमा हालसम्म करिब ७० हजार किलोमिटर सडक निर्माण भएको आर्थिक सर्वेक्षणले देखाएको छ। सरकारले सन् २०३० अर्थात अबको १५ वर्षमा ७ लाख किलोमिटर सडक निर्माण गर्ने दीर्घकालीन लक्ष्य अगाडि सारेको छ भने आगामी ५ वर्षभित्र सडक निर्माण, मर्मतसम्भार र स्तरोन्नतिको लागि ८ खर्ब १६ अर्ब खर्च गर्ने लक्ष्य लिएको छ। तर सरकारी खर्चको प्रवृत्ति हेर्दा र कर्मचारीतन्त्रको ढिलासुस्ती गर्ने परम्परागत बानीले गर्दा अबको ५ वर्षमा सडकको दुरावस्था तथा कमीका कारण यातायातका साधनको व्यवसायमात्र होइन सरकारी राजस्वमा नै असर पर्ने देखिन्छ। नाडाका अध्यक्ष अन्जन श्रेष्ठका अनसार कुल राजस्वको ३० प्रतिशत राजस्व सवारी साधनबाट प्राप्त भए तापनि सरकारको उदासीनताको कारण सडकमा खर्च भने न्यून भएको देखिन्छ।
त्यसैगरी, गत आवमा कुल ३ लाख ४३ हजार ७ सय ६५ वटा सार्वजनिक सवारी साधन दर्ता रहेकोमा २८ हजार ३ सय ६१ वटा कार, जीप तथा भ्यान छन्। विभागका अनुसार गत आवमा करिब ८ हजार ३ सय २८ वटा ट्रक, क्रेन तथा एक्साभेटर जस्ता ठूला सवारी साधन दर्ता भएका छन्। त्यसबाहेक, ४ हजार ३ सय ५३ बस, ४ हजार ६ सय २५ मिनिबस र मिनिट्रक लगायत अन्य सवारी साधन रहेको  विभागको तथ्यांकले देखाउँछ।
यसरी पछिल्लो साढे २ दशकमा नेपालमा सवारी साधनको संख्या ३०६.३३ प्रतिशतले बढे पनि सरकारको अदूरदर्शिताको कारण सवारी साधन गुड्ने सडकको कुल लम्बाइ तथा त्यसको अवस्था भने अत्यन्त दयनीय छ। विभागका अनुसार आर्थिक वर्ष २०४६/०४७ मा देशभर जम्मा ७६ हजार ३ सय ७८ वटा सवारी साधन थिए।
२०४६ सालमा प्रजातन्त्रको पुनर्स्थापनापछि अवलम्बन गरिएको खुला अर्थनीतिसँगै पछिल्लो २७ वर्षमा नेपालीको आम्दानीको स्रोत फराकिलो हुनु, सवारी साधन बिलासी वस्तुको सट्टा आवश्यकताको साधन बन्दै जानु तथा बैक र वित्तीय संस्थाको गाडी कर्जाका कारण पनि सवारी साधनको संख्या उच्च दरले वृद्धि भएको श्रेष्ठ बताउँछन्।
विभागको तथ्यांकका अनुसार पछिल्लो पाँच वर्षमै सवारी साधनको संख्या उल्लेख्य रुपमा अर्थात १७३.४० प्रतिशतले बढेको छ। आर्थिक वर्ष २०६८/०६९ सालमा देशभरका सडकमा जम्मा १३ लाख ४८ हजार ९ सय ९० वटा सवारी साधन गुड्ने गरेेको विभागले जनाएको छ ।
यस्तै, विभागका अनुसार सबैभन्दा धेरै सवारी साधन वाग्मति अञ्चलमा दर्ता भएको छ भने सबै भन्दा कम कर्णाली अञ्चलमा दर्ता भएका छन्। वाग्मति अञ्चलमा हालसम्म ८ लाख २८ हजार १ सय ७९ वटा सवारी साधन दर्ता भएका छन् भने कर्णाली अञ्चलमा जम्मा १११ वट मात्रै सवारी साधन दर्ता भएको देखिन्छ।
यस्तै, आर्थिक वर्ष २०७२/०७३ मा मात्रै ३ लाख ४३ हजार ७ सय ६५ वटा नयाँ सवारी साधन दर्ता भएका छन्। जसमध्ये काठमाडौं उपत्यकामा मात्र ७० हजार नयाँ सवारी साधनको दर्ता भएको छ तर उपत्यकामा नयाँ सडक भने १ किलोमिटर पनि बनेको छैन। केही सडक विस्तारको क्रममा रहे पनि कुनै पनि नयाँ सडक नबनेकोले आगामी ५ वर्षमा काठमाडौं उपत्यकाका सडक गाडीले भरिने देखिन्छ। यसको लागि सरकारले आफ्नै योजना अनुसार छिटोभन्दा छिटो सडक निर्माण, मर्मतसम्भार तथा स्तरोन्नति गर्नु आवश्यक छ। श्रेष्ठका अनुसार सरकारले सडक मर्मतका लागि भनेर सवारी साधनबाट लिने शुल्कमात्रै सदुपयोग गरे पनि सडकको अवस्था अहिलेभन्दा सुधार्न सकिन्छ।

Workers shutdown Ford Go Autocare

All Nepal Auto Mechanics Workers' Association unit at GO Ford Autocare has shut down the service centre of Ford vehicles in Shyambhu asking the management for 100 per cent pay and perks hike.
"The UCPN-Maoist affiliated unit of the mechanics association has locked the autocare centre since March 18, though they have been on strike from March 11," said the management that has also locked the autocare centre since yesterday.
"We want the union to start work and sit for talks," the management said, adding that the union had put forth its 21-point demand on March 9. Last year, on February 13, too the union went on strike forwarding 11-point demand, but both the union and management settled the issue through talks agreeing that there will be no strike for another two years.
But the union went on strike in a year, the management accused. The union has also started disturbing the Go Ford Automobiles in Thapathali from March 21.The trade union affiliated to UCPN-Maoist has demanded 100 per cent salary and allowance hike, and 10 per cent bonus, which according to the management is hard to fulfill.
The management also claimed that the union itself is registered under a wrong company. The GO Ford Autocare in Shyambhu and GO Ford Automobiles in Thapathali are separate companies, according to the management. "The union of GO Ford Autocare in Shyambhu has been registered under GO Ford Automobiles in Thapathali."
GO Automobiles (GO Ford) is the automotive division — that is administrative centre — of Golchha Organisation, whereas the GO Ford Autocare is the service centre that employees around 65 workers.

Nano comes to Nepal

Tata Motors is all set to launch Tata Nano -- dubbed as the cheapest car in the world -- in Nepal within a month.
"We will be launching the car in to the market very soon," chairman for Sipradi Siddhartha SJB Rana after flagging off 'Nano Yatra Nepal' here today.
"This is a historic day for us to be flagging off the iconic car in Nepal today," he said, adding that 'Nano Yatra Nepal' will take the cars to some 40,000 km across the country in thirty-five days to prove its durability and efficiency as well as promoting it in the Nepali market.
"Today's flag off is just a prelude to show the car to the people so that they can see it before purchasing it," added Rana.
Sipradi Trading -- the authorised dealer for Tata Motors India -- flagged off two Nano cars to go the length and breadth of the country to promote and prove the practical use of the vehicle for the Nepali market.
The dealers claimed that the car -- that is known for its durability and reliability -- will prove its buyers its strength in next thirty five days.
There is much speculation over the price of the car as the car costs a little over IRs 100,000 in the Indian market while the cost of the Nano for the Nepali market has not been revealed. But according to the sources, due to the heavy excise duty and taxes, it could cost somewhere above Rs 700,000.
Tata Motors in India began selling its 'one-lakh car' from 2008. The cheapest car in the world today, though the price continues to rise due to increasing material costs, is approximately 10 feet long and 5 feet wide.
Nepal will be Nano’s second international market after it launched in Sri Lank last Friday.
Sipradi Trading has been the exclusive distributor of Tata Motors Ltd India in Nepal since 1982. It sells and provides full range services of Tata Motors’ commercial and passenger vehicles.

Cheapest car to be launched

India's giant Tata Group is tomorrow unveiling the world's cheapest car, which analysts say could revolutionise prices worldwide.
Ratan Tata, the reclusive tycoon who heads the tea-to-steel conglomerate, will kick off an auto show here with the unveiling of the long-awaited 'People's Car', which will carry a sticker price of Rs 100,000 Indian Currency (IC) or $2,500.
The cheap car is a pet project of the Cornell-trained architect Ratan Tata, who helped design it, and is aimed at getting Indian families off their motorbikes and into cars. Ratan Tata has spearheaded the growth strategy of the company known for its philanthropic values. "I hope to make a contribution to making life safer for them the masses," he said.
Small cars are expected to dominate the biennial auto show, which has become one of Asia's largest and is expected to draw 1.5 million visitors, up from one million in 2006, organisers say.
"India's auto industry has found a new confidence — the show can be seen as the automotive industry coming of age," said Ravi Kant, president of the Society of Indian Automobiles (Siam).
Domestic and international carmakers have been in a race to corner India's small car market, which accounts for over two-thirds of domestic sales in the country of 1.1 billion people.
Small car sales are expected to nearly double to around two million units by 2010 as India's population becomes more affluent and trades up from motorcycles to cars.
The eight-day show features automakers from around the world from Honda, Ford, Hyundai and Volkswagen to luxury carmakers like BMW and Daimler, which are reaching out to India's new free-spending wealthy in an economy growing by nine per cent.
India's automotive industry, which produces 1.5 million vehicles annually, is worth $34 billion a year and contributes five per cent of the country's gross domestic product (GDP).
An Indian government mission plan aims for automotive sales to more than quadruple to $145 billion by 2016, and for indirect and direct auto sector employment to grow to 25 million from 13 million today.
The new car to be unveiled by the Tatas could 'revolutionise car costs downward,' said leading Indian car analyst Murad Ali Baig. "This car is bound to be followed by other low-cost ones. A lot of people just want a car that takes them from home to the market, they don't want something fancy or they want something small as a second car," he said.

Indian motorcycle maker Bajaj and France's Renault are looking at making a $3,000 car for the Indian market that would get 34-km per litre of fuel. Tata has said it is targeting its car at Indian and other emerging markets. The car would cost about half the price of its nearest rival in the Indian market made by Japanese-owned Maruti Suzuki that sells for $4,800.
A Tata Motors board member said the car would get 25-km per litre of fuel. Tata has said it believes it could eventually sell one million 'People's Cars' annually.
Tata, which has been on an aggressive overseas expansion drive, is also expected to win its reported two-billion-dollar bid for the British Land Rover and Jaguar brands in January — which would put it in the unusual position of making two prestige cars as well as the world's lowest-cost automobile.
Environmentalists see clouds on the horizon if the cheap car is a winner, fearing it will further congest India's clogged roads and add to choking pollution. But Tata says the car will create no more pollution than a motorbike.
India's car market is a huge draw because car penetration is just seven per 1,000 people compared to 550 per 1,000 in such countries as Germany or 476 in France, said Dilip Chenoy, Siam director general.

Bizarre tax rules peg back growth

Propelled by easy finance schemes on offer by almost all financial institutions and easy availability of latest models, Nepali automobile sector has been growing at a geometric proportion.
Over the last decade, the ever-changing lifestyle has also helped the sector grow. However, an orthodox and exorbitant tax regime and duty provisions have made the road difficult for the automobile sector.
According to the Department of Transport Management (DoTM), the auto sector has seen an impressive increment of more than 12 per cent in new vehicles registrations last year.
Change in existing, rather vague and complicated tax structures, can push this figure to a greater height, bringing the government more revenue.
Automobile sector contributes 14-15 per cent to the total state revenue. Despite this, the government gives it a step-motherly treatment, blame industry insiders. The government continues to levy high import duty, forcing consumers to pay a very high price for vehicles.
"Nepal has relatively high customs duty on the import of vehicles in the whole South Asian region," says Sunil Khetan, president of Nepal Automobile Dealers' Association (NADA).
"Not only that all other accessories related to automobile like engine oil, spare parts, tyre and tube and battery attract high import duties," Khetan says.
"Has there been a more scientific tax system, the pace of growth could have gone up at a better rate," Akash Golchha, executive director of Golchha Organisation says, adding that less taxes mean cheaper vehicles and cheaper vehicles mean more sales, which will ultimately bring the government more revenue.
Agrees Khetan, "If there were pragmatic tax provisions on the import of vehicles, the growth in automobile sector could have been skyrocketing."
According to him, the government on an average levies 40 per cent duty on two-wheelers, 25 per cent on tyres, 35 per cent on lubricants, 15 per cent on spare parts and 15 per cent on batteries.
"The government should not be conservative on revenue matters,” he says adding that policies that are guided by old principals of raising more money through higher rate of tax encourage illegal trade.
The government has increased excise duty to 53 per cent from last year's 32 per cent and decreased customs to 55 per cent from 80 per cent on vehicles to comply with the WTO regime. "The change has done no good," says Khetan, adding that the best policy would be to decrease customs duty so legal trade could be encouraged and the government gets more revenue.
"According to WTO also, government should bring the customs duty down," he says.
On the pretext of complying to WTO, an orgnanisation which is failing in many aspects, the Nepal government should not lower customs duty but take a long-term view, suggest some traders.
However, others think that the government must comply with the WTO commitments as it is a WTO member country and lower the customs duty.
Apart from customs and excise duty, there are myriads of other issues dampening the automobile sector.
Road tax is one of them.
"The government should spend the road tax on infrastructure development and road network upgradation, so that vehicle's life is lengthened and fuel consumption lessened," Golchha adds.
Reducing the use of fossil fuel, which is totally imported costing large amounts of foreign currency to Nepal, should be yet another strategy of the government.
The government should encourage electric vehicles not only for saving foreign currency but also for the sake of environment.
One of the major players in the automobile sector is the two wheelers segment, which is main driving force behind the sector’s growth.
A wide array of models, easy availability of vehicle loans and an increasing living standard of Nepalis have bolstered the sales graph of two-wheelers.
The two wheelers market has witnessed an average growth of 15 to 20 per cent over the last couple of years. However, the two-wheeler segment has also been victimised by the government's exorbitant and bizarre tax system.
Apart from the vehicles itself, accessories like tyres and tubes is also a major segment in the automobile sector. The total value of the tyre market, as estimated by NADA, is around Rs 10 billion.
"However, over 50 per cent of this trade is illegal," says Manoj Sethai of Bridgestone tyre, adding that the government is losing a huge chunk of revenue due to this illegal trade.
"The huge price difference on the Indo-Nepal border market encourages illegal trade," says Sethai. The difference in price of a truck tyre between Birgunj and Raxwal is Rs 3,000 to Rs 4,000. Due to the porous Indo-Nepal border, almost 50 to 60 per cent of Indian tyres enter Nepal as smuggled.
"If the government lowers the import duty, the illegal trade could be checked and revenue could be increased," Khetan suggests.
Similar is the story of Engine oil and spare parts.
"A 35 per cent duty on lubricants and up to 15 per cent on essential spare parts has encouraged smuggling of these products from across the porous Indo-Nepal border," says Khetan.
According NADA's estimation, Nepal is losing more than Rs 300 million annually on the import of lubricants mainly due to high import duty. Nepal consumes about 12,000 metric tonnes (MT) of lubricants but the official figures show that only 6,000 MT is imported. This means around 6000 MT of lubricants are being smuggled through illegal channels.
"Readjustment in the tax structure can encourage official trade," says Amar Jyoti Ranjit, marketing manager at Nepal Overseas Trading Concern, the sole distributor of Castrol lubricants that occupies 50 per cent of the Nepali market.
Similarly, the total value of domestic spare parts market, according to NADA, is more than Rs 300 billion. "Unfortunately, more than half of the spare parts available in the market arrive through illegal channels," said an industry insider, who did not want to be quoted.
The challenge facing the government at present is how to generate more revenue while keeping customs duties low, so that more people have access to vehicles and transport. But the government policy is to milk the existing consumers to the limit.
Most governments think that increasing custom rates and custom evaluation could result in more revenue being generated. But importing goods by paying a high custom rate results only in high prices of goods, making a hole in customer's pocket.

Convertible cars: The new road-beauties

Domestic auto market has in recent years witnessed a smooth growth but it is still virgin for the sporty convertible cars. These sleek, stylish and trendy head-turners are slowly luring the Nepali auto-buffs. It is evident from the fact that until a year ago, there were only a couple of convertible cars on the Kathmandu roads. But today, the numbers of these road-beauties are increasing, if not by leaps and bounds.
“The sale of convertible cars is still very low,” says Prabal Saakha, director, Saakha & Company Pvt Ltd, the authorised agent of San Motors that has launched convertible cars officially in Nepal last February.
Convertibles generally have a sportier performance than other cars, with good acceleration. The engines are revvy, giving maximum power at high revs, with engine sizes typically in the range of 1.8 litres to 3.5 litres.
Almost all the major car manufacturers like BMW, Peugot and Aston Martin have convertibles. But among them those plying on Kathmandu roads are from San Motors, which is designed by Gerard Godfroy, developed by Christopher Bhir and engineered by Phillip Beloon and Le Mans design Group, the people who has also designed Aston Martin and Peugot also. San Motors began its life to produce contemporary, exclusive and stunning cars that showcase creative excellence, claims the company.
“Convertibles are the ultimate fun cars,” says Saakha. “These beautiful machines are not for first-time buyers. After all not a single new-car buyers opt for convertibles and there are good reasons why. Even though those of us who love convertibles do our best to ignore them,” adds, Saakha, a proud owner of an occasionally driven garage queen.
Lack of interest in these fun cars might also be due to the varying needs and driving habits of the Nepalis. In general, buying a convertible car means bringing an excitement back to one’s driving experience.
But before buying a car every buyer asks, “Do I want a car just for fun or commuting?” As these open top cars have less room for occupants and luggage, the buyer might opt for other similar-sized family cars.
There is yet another reason why convertibles aren’t getting much respect. The vast majority of Nepalis would rather be encapsulated in a silent, climate-controlled, rolling den than be out in the open, assaulted by every loud noise, passing dusty clouds and quirk of the weather that a journey might bring. After all convertibles can be no fun in a hot traffic jam or amid diesel fumes on the crowded Kathmandu roads.
“This is the one section, which, unlike others, has less but quality customers,” adds Saakha. And there are no growth targets either like any other brands in the market. After all, convertibles are rolling compromises and compared with solid-roofed cars, they are less weather- and noise-tight and not as structurally strong. “Convertible car is an ultimate driving satisfaction for the driving pleasure seekers,” says Saakha adding that these rolling beauties are not expensive, if not affordable, but it must suit one’s life-style rather than pocket, as today buying a car is not an inaccessible dream for a middle class Nepali.
One can buy a convertible at Rs 1.625 million, which is in the range of any other car in the market. “But a passionate auto-lover only buys convertible.”