March 17: It has been more than three months since the ban on vehicle import was lifted. However, the auto businessmen have been struggling to import spare parts, forget about vehicles.
Due to the policy of Nepal Rastra Bank, even though the import ban has been lifted, the businessmen say that they have not been able to import vehicles as well as spare parts.
According to the monthly report published by the central bank on Sunday, the import of vehicles and spare parts decreased by 57.9 percent in the seven months of the current fiscal year compared to the corresponding period of the last fiscal year.
In the seven months of the last fiscal year (FY 2021/22) vehicles and spare parts worth Rs 86.9 billion were imported into the country. In the current fiscal year (FY 2022/23), the import decreased by about 58 percent and stood at Rs 36.20 billion.
The Government of Nepal had banned the import of 10 luxury items such as cars, jeeps, vans, motorcycles above 150 cc, alcohol among others during last summer due to the decline in foreign exchange reserves. Although the import, which was closed for eight months, was opened from December 16, vehicles and their spare parts have not been imported.
The general secretary of NADA Automobiles Dealers Association, Surendra Upreti, says that because the banks do not finance the purchase of vehicles and the interest rate has increased, the vehicles have not been imported.
“We businessmen have now reached a situation where we have to close our dealership. Now, we are not in a position to bring vehicles as well as their spare parts," he said.
Upreti says that the entire auto business has collapsed due to the inability to import vehicles.
Dhruba Thapa, president of NADA Automobiles Dealers Association, says that due to the policy adopted by the central bank, they were not able to bring vehicles because banks did not invest in this sector.
Thapa claims that the state has also lost billions of rupees in revenue due to the inability of businessmen to bring vehicles as well as vehicle spare parts.
"More than 95 percent of our vehicles are purchased through the bank," says Thapa, "But due to the central bank's policy of increasing LC margin to 50 percent, risk weight from 75 percent to 150 percent, and 50 percent down-payment of cash for vehicle purchases, banks have not invested in vehicles at the moment."
Thapa says that if the central bank does not adopt some flexibility in the current policies and revises the policies such as risk load, LC, etc., there will be a big crisis in the automobile business in the near future.