--By Suraksha Adhikari 

 

In a country like Nepal where a proficient transportation service seems to be a far-fetched dream, two-wheelers have become the easiest and cheapest way to get around. Motorcycles have become the choice for the people working during odd hours to move around in the busiest roads of capital or the bumpy roads in the countryside or say the narrow roads where the four wheelers cannot easily pass by. 

 

With the arrival of the main festivals in Nepal, the mob of people is seen around the motorcycle showrooms to grab the offers and schemes provided by various companies on the occasion of festivals. Adhir Kumar Shrestha, Assistant Managing Director of V.G. Automobiles Pvt. Ltd said that the sale of motorcycles has increased to double following the offers. This company has already sold around 1,200 units of motorcycles in short span of being authorized dealer of Nepal. 

 

Shekhar Golchha, President of the Nepal Automobile Dealers’ Association (NADA) said that the size of the market increases during the festival season because of the trend of buying new things during the special occasions. He said, “Around 20 to 50 per cent of total sale of two wheelers on Nepal is during Dashain.”

 

He added, “The first choice of people after having some amount of money is automobile and Dashain is the most suitable occasion for the people to buy new things in the family.”

 

The road widening drive in Kathmandu and other cities in the country started some time ago. However, most roads still await completion. “Having wide roads will definitely have a positive impact on the industry,” said Shrestha.

 

Market Status

After the continuous dropdown of the two wheelers market for more than two years, the market has again picked up the pace. As per the data of Department of Transport Management the import of two-wheelers rose 22 percent in the first nine months of the fiscal year compared to the same period last year.

 

Analyzing the data of past one decade, the motorcycle segment has witnessed a very impressive growth. The number of two-wheelers has grown from 26,547 in fiscal 2003-04 to 175,381 in fiscal 2012-13.

 

One of the largest players in the two-wheeler scene in the country, HH Bajaj, reported that they had witnessed a growth in sales of more than 40 percent. The company has so far sold around 30,000 units of two-wheelers. Shekhar Golchha, executive director of HH Bajaj, said that the reason behind the increase in sales was the bounce-back effect afterv a huge fall.

 

The enormous growth the two-wheeler segment has been witnessing annually has been spreading to areas outside the capital city. While the market for two-wheelers has come to a saturation point in the Kathmandu valley, sales outside the valley have seen a massive growth. 

 

Factors in Increasing Sales

The easy availability of auto loans at a lower interest rate compared to the past few years has contributed to the growth in auto sales. Currently, finance companies are offering auto loans in the range of 9.5 to 12 percent interest. “As two-wheelers are the means of transportation of the general people, easy availability of finance has played a positive role in the increment in sales,” Golchha said. Meanwhile the sales of two-wheelers had increased as public transportation isn’t reliable in the country. Launching of schemes by motorcycle dealers round the year and new model rollouts too have aided growth. 

 

Problems and Challenges

Traders say that the license distribution system of Transportation Management Department is capital centric which has been creating problem to the license holder outside the valley. This has been degrading the sale as the facility of trial for two wheelers is only in Pokhara and Kathmandu after the upgrade of license distribution system. 

 

Other major challenges include transportation hurdles and traffic management. Pradip Pradhan, member of NADA, said that the government’s categorizing automobiles in the luxury segment has hindered the growth of the sector.