2021 In Review: 21 Highlights Of The Nepalese Automobile Sector

And just like that, another year has passed. 365 days gone although it feels only like yesterday. 2021 was a different year, it was a difficult year. The entire world that was devastated by a pandemic in 2020 was still reeling from the aftermath.2020 really was a rollercoaster ride. The automotive industry was also caught in this ride, being one of the worst-hit industries during the pandemic. The 2020 pandemic not only crippled the industry but has also left lasting wounds that came into light in 2021, wounds that will take time to heal. Now that we look towards 2022 with hopes of prosperity, let's look back at 2021 one last time and reminisce on all that happened in the automotive industry of Nepal.(In no particular order)1.  New Arrivals: Proton, GWM, Citroen, Chery, Changan, Super Soco, SYM and Keeway MotorcyclesThe year 2021 saw the arrival of eight new brands in the Nepalese automobile sector. Jagdamba Motors Pvt. Ltd, a subsidiary of Shanker Group, introduced the Malaysian brand Proton in the Nepalese market. The first model by the brand was the Saga sedan, it was later followed by the X70 premium SUV.Read our review of the Proton X70 by clicking hereVG Impex Pvt. Ltd, the sole authorised distributor of Great Wall Motors in Nepal, officially unveiled Haval SUVs and Great Wall Motors in the Nepalese market. Haval is Great Wall Motor's sub-brand that specialises in crossovers and SUVs.  The company introduced the 3rd gen Haval H6, Haval Jolion, and the GWM Poer pickup.Here is our take on the GWM 3rd Gen Haval H6: 3rd Gen Haval H6: The Game Changer | Test Drive, ReviewFrench auto major Groupe PSA brought its Citroen brand to Nepal with the launch of the Citroen C5 Aircross SUV in 2021. Shangrila Motors Private Limited, the authorized distributor of Peugeot brand vehicles for Nepal, had also been appointed as the authorized distributor of Citroen brand vehicles for Nepal by Groupe PSA, France. The company also inaugurated the company's “La Maison Citroën” showroom in Thapathali, Kathmandu. The first product from the Citroen brand for Nepalese customers. Priced at Rs 1.35 crore, the C5 Aircross SUV is a premium mid-size 5-seater SUV directly imported from France.You can watch the highlights of the Citroen C5 Aircross SUV by clicking hereSimilarly, Chery, China's largest passenger vehicles exporter, officially signed an agreement with SPG Automobiles, a company under Sharda Group as its authorized distributor and entered Nepal with the Tiggo 4 Pro compact SUV.Check out the product highlight or read our review of the Chery Tiggo 4 ProChangan Automobile, the globally acknowledged Chinese automaker, made its way into Nepal. The first Changan product in the Nepalese market was the 'Alsvin' premium sedan which was later followed by the 'Hunter' lifestyle pickup.On the two-wheelers front, SYM re-entered Nepal with KG Intercontinental Pvt. Ltd, as the authorised distributor for the brand’s motorcycles and scooters in Nepal, introduced the SYM NH T200 adventure bike in the Nepalese market. Similarly, to cater to the cruiser motorcycle enthusiasts in the country, KTM International Trading Pvt. Ltd introduced two Keeway motorcycles, K-Light 202 and Patagonian Eagle 250 in Nepal.D-lifestyles Pvt. Ltd. launched Super Soco, a premium range of EV bikes and scooters with the slogan “Revolt”, in the Nepalese market. Five new Super Soco models were released. These included two electric scooters - Super Soco CUx Super Soco CPx, and three electric bikes - Super Soco TC Max, Super Soco TC, and Super Soco TSx.2. Ford Nepal won't halt its services or operationsIn a rather shocking announcement, Ford Motor announced that it will stop manufacturing cars in India and shut down its plants in the country. Ford had been struggling in the Indian market amid weak domestic volumes, falling exports, and a lack of new products. As per reports, Ford will be closing down its manufacturing facilities altogether by Q2 2022. It won’t be producing models or engines for exports either. However, Ford will continue to fulfil existing export orders before closing down its facilities.Talking about the Nepalese market, Ford Nepal won't halt its services or operations. The company will continue to provide services to its already existing consumers. Similarly, it will also bring in global models like Ranger and Raptor, and the Everest SUV instead of the Endeavour.  The company also has plans to introduce the Mach E electric car, Bronco SUV and Territory crossover SUV, in the near future.3. Dhruba Thapa elected the new NADA PresidentDhruba Thapa was elected as the President of the NADA Automobiles Association of Nepal during NADA's 45th AGM and elections. In a hotly contested election, Thapa defeated another presidential candidate Karan Chaudhary by 66 votes. Thapa got 1413 votes while Chaudhary got 1347 votes. Similarly, 12 members of Chaudhary's panel and 5 members of Dhruba Thapa's panel have won from the member side.4. Govinda Bhattarai elected at the 2021 FIA General AssemblyFor the first time, Govinda Bhattarai from NASA Nepal was included in the working committee (also called the presidential and world council) from Region II at the 2021 FIA General Assembly. The Federation Internationale de l'Automobile (FIA) is the governing body for world motorsport and the federation of the world’s leading mobility organisations. Founded in 1904, with headquarters in Paris and Geneva, the FIA is a non-profit organisation. It brings together 245 Member Organisations from 146 countries on five continents. Its Member Clubs represent over 80 million road users and their families.5. Creation of JAAM NepalTo bring together journalists working in the field of automobile and mobility, the Journalist Association for Automobile and Mobility (JAAM Nepal) was officially created under the Presidency of Ujwal Jung Shah. Although there are many journalists organizations in the country, there is no organized body for journalists working in the auto sector,  hence there was a need for such organizations in the country.  JAAM is also committed to assisting in the training and development of auto journalists who are actively involved in the sector.Nepal Drives is a part of JAAM Nepal. 6. TVS Ntorq crosses 50,000 sales milestonesWhen TVS introduced the Ntorq in 2018, it was a well-received addition to the 125cc scooter segment.  As an offering targeted towards youngsters, the Ntorq 125 scooter ticks all the right boxes in terms of style, comfort, performance, and convenience. The scooter made quite an impact in the 125cc scooter segment with sales numbers exceeding more than 1 lakh sales in international markets including Nepal. TVS Motor Company, in 2021,  announced that the TVS Ntorq 125 has crossed the sales milestone of 50,000 units in Nepal. The scooter achieved this sales mark within three years of its launch.Read our review of the BS6 TVS Ntorq 125 RTFi here7. Inauguration of SJ MotoSJ Moto, Nepal's first motorbike gallery and cafe, opened its doors to the general public in February 2021. Established by Saurabh Jyoti, director of Syakar Trading Company Pvt. Ltd, a household name in the Nepalese business sector, SJ Moto has a retail outlet inside Jyoti Bhawan, Kantipath, where customers can buy brand new and reconditioned superbikes along with official merchandise and clothes of various brands including Marvel and DC.SJ Moto also showcases a commendable motorbike collection of some historic masterpieces related to our country’s history along with superbikes as well. Motorbike enthusiasts can visit there to witness a marvellous collection of superbikes and drink coffee and have some Nepalese cuisine in a cafe located there.8. Yatri Motorcycles officially launches Project Zero and showcases Project OneYatri Motorcycles officially launched the long-awaited Project Zero (P0) and Project One (P1). The P0 was priced at Rs. 19,49,000 and the P1 at a more reasonable price of Rs. 4,95,000- Rs 5,44,900. The company also announced to build 150 P-1 DC Fast Chargers across the nation by Summer 2022.Read more here: Yatri Motorycles Launches Project Zero and Project One9. Nepal Electricity Authority (NEA) to construct 52 charging stationsNepal Electricity Authority (NEA) said that the process of construction of 52 charging stations in different parts of the country has moved ahead. The work is currently underway to complete the construction process by April 2022. NEA and Chinese company Wanbang Digital Energy reached an agreement last April to build charging stations. According to NEA, those 52 stations will be built in 33 different places of the country. NEA has stated that it has given priority to the busy roads of the country. While charging the vehicle at the charging station, the fee has to be paid as per the Electricity Tariff Collection Regulations 2077. The charging fee has been fixed separately as per the provisions in the regulations.How much you will pay for it? Check here10. BMW celebrates its first anniversary in NepalThe German marquee has now completed its first year successfully in Nepal. Laxmi Premium Motors partnered with BMW Asia and BMW Bangladesh to open the doors of a new 10,165 sq ft BMW dealership in Tinkune, Kathmandu. Partnering with BMW Asia and BMW Bangladesh, the official dealership now serves as a key touchpoint for customers to engage with the brand throughout their car ownership journey.Despite the bumps in the road to providing premium vehicles to Nepali people with service and spares to not worry about, Laxmi Premium Motors is really happy and like their vehicles, they have sailed over their obstacles and still stand strong.Read more about BMW's journey here11.  Nepal Government sets standards for two-wheelers assembly plantsThe Ministry of Industry, Commerce and Supplies set out four mandatory conditions to be followed by companies interested in setting up a motorcycle assembly industry in Nepal. Such criteria have been prescribed for industries following the CKD (Completely Knock Down) policy in assembling two-wheelers. While issuing a notice, the ministry has announced that such industries should ensure certain domestic value addition, create employment, use indigenous raw materials, and assess environmental impact and security. The logic behind these conditions is that the country should benefit from vehicle assembly plants in the areas of domestic value addition and employment after the government provides various tax exemptions for such plants.Through the budget of the current fiscal year, the government had taken a policy to encourage the vehicle assembly industry in Nepal. As of now, Bajaj and TVS companies are assembling two-wheelers in Nepal. The department has stated that about two dozen industries have been registered in the department for the same purpose.12. Ban on import of expensive vehicles liftedThe government has now lifted the ban on the import of expensive vehicles on the recommendation of the Ministry of Industry, Commerce, and Supplies. The cabinet meeting held on March 9, 2021, decided to lift the ban on the import of vehicles worth more than USD 50,000.The government introduced the ban in March 2020 in order to save its foreign exchange reserves due to the impact of the COVID-19 pandemic. Although expensive vehicles cover a little share of the segment, the auto sector is set to get a boost with the cabinet's decision.With the ban now lifted, companies like Toyota, BMW, Land Rover, Mercedes-Benz, etc., will now be able to import several of their new models into the country.13. Replacement bill 2078/79 B.S. makes two-wheelers costlierThe replacement bill brought by the government increased excise duty on two-wheelers. The replacement bill increased excise duty on motorcycles and scooters above 125cc by 10 percent. With the increase in the excise duty, the prices of the highest-selling sub-500cc segment will go up. Earlier, 40 percent excise duty was levied on motorcycles and scooters up to 250cc, but now the classification of motorcycles has been changed.Accordingly, 40 percent excise duty will be levied on 125cc motorcycles, 50 percent on 125 to 200cc motorcycles and 60 percent on 200 to 250cc motorcycles. Similarly, excise duty on 500 to 800 cc motorcycles has been increased by 20 percent. Earlier, the excise duty on motorcycles between 500 and 800cc was 80 percent. Now, 100 percent excise duty will be levied on this segment. Similarly, above 800cc, the excise rate remains the same as earlier i.e., 100 percent.The road construction fee which is adjusted in the final pricing of the motorcycle has also been increased by the replacement bill.Similarly, the government has decided to give a 50 percent excise duty exemption on two-wheeler, four-wheeler and assembly kits imported by companies to be assembled in Nepal through the bill. According to this decision, the price of vehicles assembled in the country will decrease in some models.  Currently, Bajaj and TVS are assembling motorcycles in Nepal, while brands like Yamaha, Honda and Suzuki are looking to set up assembling plants.14. Metropolitan Traffic Police Division introduces Document Tracking and Instant Payment systemMetropolitan Traffic Police Division introduces the Document Tracking System and 'Pay Fine On The Spot - Instant Payment System' system. The Document Tracking System (DTS) developed by Janaki Technology will provide information about the documents taken under control by the traffic police against drivers violating various traffic rules. MTPD believes this new system will make the services provided by the Traffic Division even more effective, convenient and simple by making the documentation process hassle-free.Similarly, drivers who have violated traffic rules can now immediately pay the fine as per the rules and withdraw their documents from the place of action.  In the first phase, the service started from five traffic offices including Gaushala, Durbar Marg, Thapathali, Jawalakhel and Janasewa. However, drivers who drive under the influence of alcohol, do not follow lane discipline and violate red lights can only get their documents back from the Traffic Police Department after receiving traffic awareness training, the department said.15. Nepal’s first motorsports academy opens its doors Nepal Automobiles' Association (NASA Nepal), the pioneer in the field of motor and motorcycling sports in Nepal for more than a decade, inaugurated Nepal's first motorsports academy at Himalayan Motorland in Dhulikhel. Adding a new dimension to motorsports in Nepal, the academy will make an annual program for driver/ rider preparation, sports license distribution, girls on the track program, and other campaigns.16. Vehicle import becomes costly; 50% margin for LC compulsoryAs per the new directive issued by the Nepal Rastra Bank (NRB), automobile importers in the country now have to maintain a 50 percent margin when opening the letter of credit (LC). Earlier, importers were allowed to keep a margin of 1 percent only. This amendment by Nepal Rastra Bank increased the price of vehicles and motorcycles in the market. However, this does not apply to electric vehicles and imports from government agencies, diplomatic missions and hospitals.The provision of opening the LC with a margin of 50 percent of the vehicle price will create a situation for importers to raise money in advance to import goods. Banks will not be allowed to pay interest on such margin amounts. Similarly, no bank will be allowed to disburse loans (in domestic currency) for the purpose of depositing margin amounts. Banks will now have to collect margin amounts from the importer at the time of opening the LC. When paying the import amount, the such margin will be paid from the amount. Keeping 50 percent of the value in the margin will lead to high-interest costs, therefore, increasing the price of cars and motorcycles.17.  Bagmati Province increases yearly tax for two-wheelers and four-wheelersBagmati Province revised the yearly tax structures of two-wheelers for 2078/79 B.S. The Monetary Act 2078 issued by Bagmati Pradesh increased the annual tax on two-wheelers. The new annual tax structure for two-wheelers up to 125 cc engine capacity is Rs. 3,000. Earlier, it was Rs 2,800. Similarly, two-wheelers with engine capacity of more than 150 cc to 225 cc will now have to pay Rs 6,500 in annual tax. Earlier, the annual tax was Rs 5,500. Likewise, the new annual tax structure for two-wheelers from 225cc to 400cc is Rs 11,000. Earlier, it was only Rs 9,000.The province also revised the yearly tax structures of four-wheelers for 2078/79 B.S. The Monetary Act 2078 issued by Bagmati Pradesh has increased the annual tax on all types of cars, jeeps, vans and microbuses with the start of the new fiscal year. The new annual tax structure for four-wheelers up to 1000 cc engine capacity is Rs. 22,000. Earlier, it was Rs 21,000. Similarly, four-wheelers with engine capacity of more than 1001 cc to 1500 cc will now have to pay Rs 25,000 in annual tax. Earlier, the annual tax was Rs 23,500. Likewise, the new annual tax structure for four-wheelers from 1501 cc to 2000 cc is Rs 27,000. Earlier, it was only Rs 25,00. Furthermore, the new yearly tax rate for four-wheelers with engine capacity between 2001 cc to 2500 cc is Rs 37,000. Moreover, four-wheelers with engine capacity between 2501 cc to 3000 cc will now have to shell out Rs 50,000, an increment of Rs 9,000 from the earlier rate.  Similarly, four-wheelers with a cubic capacity between 3001 cc to 3500cc will now pay Rs 60,000 in annual tax. Finally, four-wheelers above 3500cc will have to pay Rs 65,000 in annual tax.18. Grey Imports now illegal; Authorised Dealership becomes compulsoryThe budget of 2078/79 B.S. provided that only manufacturers and authorized dealers can import vehicles in Nepal. The Finance Act 2078/79 made a provision that no one other than the manufacturer and authorized seller can import vehicles in the country. This comes at a time when several units of Audi and Tesla were imported into Nepal without any authorized dealership.In the last finance act, the government made an arrangement to exempt the vehicles that have been imported illegally at customs by paying a fine of 30%. As of this, new vehicles purchased from the manufacturing company or its authorised distributor were allowed to sell in the Nepalese market even if there is no authorised distributor in the country. It established a legal route to import these vehicles after paying a fine. Furthermore, according to the new provision, if such vehicles are imported in violation of the condition, such vehicles and means of transportation will be confiscated by the Finance Act.19. Government reduces excise duty on hybridsIn an effort to promote electric and hybrid vehicles, the government reduced excise duty on hybrid cars. The excise duty on electric vehicles was also completely waived in the budget of the Fiscal Year 2078/79 B.S. In addition, the government also reduced the customs duty on EVs. Earlier, excise duty was levied on plug-in hybrid and hybrid vehicles at different rates, but now 40 percent excise duty has been levied on both vehicles. Earlier, hybrid vehicles were subject to 60 percent excise duty. The Financial Ordinance now states hybrids as "other vehicles, both compression-ignition internal combustion piston engines (diesel or semi-diesel) and electric motors, can be charged by plugging an external source of electrical power."20. Government reduces custom duties on EVsThe government has revised the customs duty on electric vehicles. Former Finance Minister Bishnu Prasad Poudel fixed the customs rate from 10 percent to 40 percent through the budget of the Fiscal Year 2078/07 depending upon the motor capacity. The excise duty on electric vehicles was also completely waived in the budget of the Fiscal Year 2078/79 B.S.The financial ordinance announced 10 percent customs duty on electric cars, jeeps and vans up to 100 kW capacity, 15 percent on vehicles from 100 kW to 200 kW capacity, 30 percent on vehicles with 200 to 300 kW capacity, and 40 percent on vehicles above 300 kW capacity.21.  Excise duties on EVs finally removedFormer Finance Minister Bishnu Prasad Poudel informed that the excise duty on electric vehicles has been completely waived in the budget of the Fiscal Year 2078/79 BS - a much-needed relief to consumers and businesses who are planning to go electric. The government has also revised the customs duties for EVs. Earlier, customs duty was levied at 1 percent on public transport and 10 percent on private vehicles.All that brought the amazing ride of 2021 to a close. We now look to an optimistic 2022 and wish you a very happy new year and hope for your continued love and support.