FinMin urges private sector to promote vehicle assembling

Kathmandu, September 11

Finance Minister Yubaraj Khatiwada has urged automobile dealers to prioritise establishing vehicle assembling plants in the country over promoting import of automobiles.

Inaugurating the 13th edition of NADA Auto Show here today, Khatiwada said that increasing vehicle import is one of the major reasons for country’s ballooning trade deficit and why its import has to be discouraged.

“Vehicle import has been rising as people are increasingly purchasing vehicles through financing from banks and financial institutions (BFIs). However, increasing consumption which is based on debt does not make our economy strong,” he said, adding priority has to be given to promote consumption based on earnings.

Citing that operating vehicle assembling plants will not only reduce vehicle imports but also generate employment opportunities, boost economic activities and ultimately narrow down the trade deficit, Khatiwada vowed that the government will support the private sector in establishing vehicle assembling factories.

Meanwhile, Khatiwada also defended the hike in excise duty for vehicles citing it was necessary to discourage vehicle imports and address the trade deficit issues. However, he vowed that the government will introduce automobile industry-friendly policies in the future.

Addressing the event, Sambhu Prasad Dahal, president of Nepal Automobile Dealers Association (NADA) — the organiser of the event — said that vehicle sales have come down drastically in recent months owing to unfavourable government policies.

“The private sector has injected billions of rupees in the automobile business and the industry is providing employment to thousands of people,” said Dahal, adding that in such a context, the government’s policy to increase taxes on vehicles is not justifiable and is hitting the industry’s growth.

Meanwhile, he also urged the government to consult the private sector while forming various policies related to the automobile industry.

On the occasion, Bhawani Rana, president of the Federation of Nepalese Chambers of Commerce and Industry, said that though earlier the private sector was happy to get a technocrat as a finance minister, today it is disappointed with the government for its failure to address key issues related to taxation system and policy reforms.

“However, we expect the government to not overlook the concerns of the private sector in the coming days,” said Rana. She also urged the government to promote electric vehicles in the country by establishing vehicle charging stations across different routes throughout the country.

General view of the expo, in Kathmandu, on Tuesday. Photo: THT

The six-day long auto exhibition is regarded as the flagship event of domestic automobile dealers. As per organisers, the auto show this year has participation of 71 companies related to automobiles, lubricants, tyres and financial institutions, among others.

As per NADA President Dahal, 19 four-wheeler brands and 21 two-wheeler brands are showcasing their products in the exhibition. The event has altogether 134 stalls. “Participating automobile brands are scheduled to launch their new products at the event while they have also announced lucrative discounts on purchase of different vehicles at the event.”

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