What is your take on current scenario of NRB restricting the import of automobiles?
What should really be understood is that vehicle is now no more a luxury but a necessity and needs to be reclassified. Vehicle to what extent is a luxury? As soon as a family has more than two or three members, they need a vehicle as a two-wheeler is not sufficient. The government did address this fact and exempted taxes as well. Also, the cost of EVs has not increased, which is a plus point. The way how government acknowledged these facts and attempted classification of vehicles is praiseworthy. However, it’s not a good thing the government did by restricting imports, and I am not in support of it. I would say this was a rather hasty decision taken by force. Government should have considered and explored more options for curbing the outflow of forex reserve.
What impact has it made on your business?
This restriction obviously impacted the entire motor sector, and CG Motocorp is not an exception. Now I am not able to sell or import the vehicles in the proportion that I used to prior to this restriction. I feel that it would have been a better approach if the government had focused on the amount contributing to the government’s treasury as well, along with the outflow of money. The business of CG Motocorp is affected approximately by 20 percent by this restriction. I feel like the business would have actually flourished if the approach of restriction itself had been implemented in a more controlled way.
Government, citing the decline in Forex reserve, has introduced policies that list automobiles as a luxury product and has restricted their import. What do you think needs to be done to overcome the issue?
First of all, there is a need to conduct RCA, Root Cause Analysis, to clearly point out where the main problem lies, which I think the government has already accomplished. This will also help in targeting each of the industries and trading houses for fruitful approaches in short-term, medium-term, and long-term plans. We should also not ignore the fact that many youths are going out for education and we are investing on them. Most of them are not returning to the country. It’s like a continuous investment with no returns, we fund their education, and they work abroad and pay taxes therre. What I mean to say is that the government should categorize the sectors of expense and the sectors that will benefit back to it for the success of plans in the long term approach.
What were the problems automobiles sector facing prior to this crisis situation from the side of the state or government itself?
The crisis that occurred this time was more of a radical crisis. If we take a look at the last five years, we always face the problem regarding liquidity around this time, and we predicted this was going to happen sooner or later. All the other issues are somehow anticipated as not all variables can be recognized. The only complaint with the government is that the government has categorized the automobile sector as unproductive. As soon as the categorization is changed to productive, every aspect starts falling into place in favor of the automobile sector. Thus, the government should change the categorization of the automobile sector from unproductive to productive.
What are the measures that can solve the problems revolving automobile business? What should the government and stakeholders do?
As I mentioned before, the government should classify the automobile sector as productive in the first step, in addition to categorizing the luxury and non-luxury products as well as the productive and unproductive. As the second step, active lobbying should be done at various institutions like the Nepal Rastra Bank, Customs Department, and Ministry of Finance while adopting the 360 degree approaches, and that will automatically solve all the problems. The clarity in categories will enable all the stakeholders to realize the contribution made to the nation by each sector and change their perception. With this one simple step at the macro level, with the trickle-down phenomenon, policies will automatically change at the micro level. The opening restriction would be a short-term approach which is why clear categorization is the single necessary approach to adopt at the present in favor of automobiles in the long run.