Print Edition - 2015-07-03 | MONEY
Auto registrations hit all-time high
Jul 2, 2015-
The automobile business has been revelling in double-digit growth with new registrations in the first 11 months of the fiscal year reaching an all-time high. The jump in motor vehicle sales has been attributed to growing purchasing power and increased remittance inflows.
According to the statistics of the Department of Transport Manage-ment, 218,360 automobiles were registered during the 11-months period, recording a year-on-year growth of 10 percent. The fiscal year 2012-13 was a great year for automobile dealers with 208,483 vehicles registered. Vehicle registration had crossed the 200,000 mark in 2009-10 when 201,787 automobiles were registered.
“There has been a significant growth in sales of automobiles this fiscal. Since the automobile market is driven by remittance, a growth in the inflow of remittance has helped the market to witness the upward trend,” said Shekhar Golchha, president of the Nepal Automobile Dealers’ Association. “Sales in remote areas like Jumla have also been encouraging.”
Golchha said that another reason behind the surge in sales was increasing accessibility of roadways. “Interestingly, automobile growth in rural areas has been better than in urban areas, and that is a good sign.”
Registrations of almost all types of motor vehicles, namely bus, mini bus, mini truck, heavy equipment, car, jeep, van, pick-up, micro, tempo and motorcycle, have swelled, according to the department’s stats.
Registrations of motorcycles, in particular, have swelled 24 percent with 179,850 motorcycles registered in the first 11 months compared to 145,590 during the whole of the previous fiscal year. While sales of motorcycles are significant in rural areas, scooter sales are driving the market in urban areas, according to Golchha.
Registrations of cars, jeeps and vans swelled 18 percent to 12,014 units in the 11-month period while 10,156 units were registered during the whole of the previous fiscal year.
Easy access to auto loans provided by financial institutions is another reason behind the sharp growth. Traders said that 55-75 percent of the cars, jeeps and vans plying on the roads were financed by banks and financial institutions. The case of two-wheelers is almost the same.
Rupesh Sharma Bhatta, assistant general manager, sales and marketing at Laxmi Intercontinental, the sole authorized distributor of Hyundai four-wheelers in Nepal, said that sales had been impressive before the earthquake. “Easy financing is the main factor propelling this growth,” Bhatta said. According to him, financial institutions were offering loans at an annual interest rate of 7.9 to 8.5 percent before the earthquake. However, interest rates have increased 1 percent on average after the disaster, Bhatta said.
Most four-wheeler buyers are a mix of first-time buyers and those wishing to upgrade to more sophisticated machines, he said. “Four-wheelers are emerging as a necessity.”
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Published: 03-07-2015 08:25