'Automobiles are Not Luxury Products'

  2 min 26 sec to read

The restriction imposed by the government on the import of automobiles has affected the business of the entire automobile sector. If you look at the scenario, the automobile industry is one of the major contributors to the country's revenue. So, looking at the present context ban on the import of vehicles, NRB's restriction on banks on providing loans, and LC, the automobile sector has already faced a major blow. However, in the context of Great Wall Motor (GWM) Nepal, the situation is grimmer as we are new to the market, and we were moving ahead slowly with baby steps, and such a decision coming at this time has impacted us adversely. Even though the overall automobile sector is disrupted, we, new to the market, have suffered a huge impact.

We understand that the government has been compelled to take such a decision due to various factors, especially due to the declining Forex reserve. However, the impact of the decision is immense. First, and the foremost government has lost a major source of tax revenue. Likewise, many jobs are in danger. According to NADA, the automobile industry provides more than 100,000 direct jobs and supports indirect employment opportunities for more than one lakh individuals. In the present context, all of these jobs are in danger. The disruption is on a big scale, not only our business but the entire national economy has been impacted.

The Forex reserve is in crisis, and support from the entire sector is the need of the hour. However, the government needs to take a long-term decision. If we look at the import and export data, not only automobiles but the entire import has led to the decline of Forex reserve. However, we need to do research on sector-wise. I don't think the auto industry is the only major key player in imports.

Additionally, the government categorization of automobiles under luxury products is not valid. If you look at the current context, our public transportation is not strong. People are not comfortable travelling on public buses, and that is why they opt to buy cars and bikes, especially women who don't feel safe. So, in that context personal vehicle is a basic need rather than a luxury.  

So, the government looking at the overall context needs to make a long-term and far-sighted decision. Putting a complete ban will sabotage the automobile sector with more than Rs 100 billion in investments. The government now must reconsider the ban at least based on categories of the vehicle. Billion worth of orders are stuck at the borders, and companies’ especially new ones like us might collapse if we aren't unable to sell them in time.

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