The auto industry is suffering a slight slump, however the industry appears resilient and on the road to growth. B360 spoke with leaders of the country’s top auto companies to get insight into the future of the auto industry in Nepal.
[nextpage title="Karan Chaudhary" ]Karan Chaudhary
Executive Director, Chaudhary Group
Will the auto market continue to boom in 2018/19?
The Passenger Vehicles in particular didn’t show growth in comparison to last fiscal year. In fact, there is marginal de-growth. We are optimistic that the auto sector will grow in the coming year.
What are some of the trends that are considered positive for the auto market?Boom in auto market indicates positivity of country’s economy. However, positivity is in scarcity if you talk about the auto market. Automobile is a necessity rather than luxury in our country where public transport which is improving but is not up to the mark yet. The road connection outside the valley is a positive point for the industry’s growth.
What are the challenges functioning in an economy where the auto market is highly regulated? The regulatory body needs to view the auto industry as a necessity and policy should be made in accordance. Then there is tightening in auto loan with high interest rate which is a negative sign for most customers given that auto loan is the most preferred payment medium. There has been negative scenario for automobile industry since last three years and the industry is continuously working in uncertainty.
How do you scale brand awareness and push sales in Nepal’s competitive distribution arena? Suzuki has high brand awareness. High brand awareness makes you competitive but does not necessarily ensure high volume. This is where our focus has always been, we cannot relax saying customers know us. Customers are very smart and they make rational decision based on the best choices. Presenting ourselves as the best choice for investment is what we are focusing to push our sales in.
What among global auto trends excites you? Technological innovation that is designed to make road transport safe and convenient is what excites me.
What is the future? I believe EV is the future.
[/nextpage] [nextpage title="Saurabh Jyoti" ]Saurabh Jyoti
Director - Jyoti Group of Companies and Chairman - Syakar Trading Company
Will the auto market continue to grow in 2018/19?
Vehicles whether two-wheelers or four-wheelers are general source of mobility of people and the auto market has to increase. The government’s newly issued excise duty and vehicle tax has resulted in depletion of sales for automobile companies in Nepal. Mainly, the low cc vehicles should be considered a necessity rather than luxury by the government.
What are some of the trends that are considered positive for the auto market? Most of the new vehicles in the market are of Euro 3 policy which are efficient and environment-friendly. There have also been good policies introduced by the government for promoting electric vehicles in Nepal. Also, capital investment in infrastructure such as roads development by the government is another positive side for the auto market as well as the country. Various positive policies have been introduced by the government but implementation is necessary.
What are the challenges functioning in an economy where the auto market is highly regulated? The spending capacity of the general public can be regarded as a major challenge for the automobile industry. Here in Nepal, especially in Kathmandu, personal mobility is highly necessary for people due to discomfort in public transportation. But, the price factor of buying a personal vehicle is a major challenge for the general public. For the cost of one motorcycle or a scooter in Nepal, you can get two in India, and for the cost of one car, you can get three in India. So, price factor is a major challenge for both automobile industry and general public which also has direct effect on the economy of the country.
How do you scale brand awareness and push sales in Nepal’s competitive distribution arena? Here at Syakar Trading Company, we believe in focusing in after sales services rather than sales directly. We have been providing various after sales services like warranty, free servicing, 24/7 emergency services, exchange services and providing helmet upon purchasing our motorcycles for safety reasons which has created positive image of our company in the market. We focus and value safety of our customers more and have been mainly creating awareness in this particular area.
What is the future for automobile industry globally? Innovation will always be the key to the future. Because environment has been a burning issue for few decades, automobile companies are now focusing mainly on innovating automated and connected vehicles which are electric; meaning environment-friendly.
[/nextpage] [nextpage title="Shahil Agrawal" ]Shahil Agrawal
Managing Director, Shankar Group
Will Auto Market Continue to grow in 2018/19?
Yes, the auto market should grow during this period also. The rate of growth might be low but the market will grow in an organic manner.
What are some of the trends that are considered positive for the Auto Market? Well, there are a lot of factors that can be of help to the auto market, to mark the important ones:
Rise in per capita income, better job opportunity as the country is going through development phase and lastly, government and private sector spending.
What are the challenges functioning in an economy where the auto market is highly regulated?
Well, the biggest challenge is the cost of ownership of an automobile for the middle income group.
How do you scale brand awareness and push sales in Nepal’s competitive distribution arena? Competition is everywhere; we focus on our brand and product strengths. Also network and service is an important area where we try to do our best.
What among global auto trends excite you? EV is the future of automobile and it is very exciting.
[/nextpage] [nextpage title="Rupesh Sharma Bhatta" ]Rupesh Sharma Bhatta
Deputy General Manager – Sales and Marketing, Laxmi Intercontinental / Hyundai Motors Nepal
Will the auto market continue to boom in 2018/19?
Looking at the current situation, I don’t think the auto market will boom in 2018/19 because currently the sales growth is relatively slow. The government has categorised automobile market as unproductive sector, which means that we aren’t in the priority list of banks. Almost 80-85% of vehicles are sold in terms of auto financing. So, this will be one of the many factors that will stop auto market from thriving. The boom in auto industry experienced in 2016 cannot be repeated or exceeded due to the new policies introduced by the government.
What are some of the trends that are considered positive for the auto market?Though the government has increased the excise duty and vehicle tax rate, which have made it difficult for people to own their desired vehicle, there is a positive vibe in the market led in by customers’ desire to own a vehicle of their own. Such is also due to lack of proper public transportation, in terms of quick mobility or even because of customers’ want to own a particular vehicle. Although the government has kept personal vehicles as luxury products, people still believe that it is a necessity rather than a luxury which is encouraging for automobile companies.
What are the challenges functioning in an economy where the auto market is highly regulated? Since we are in automobile business, we have to forecast every bits and pieces while doing a business, whether it is about the quantity, the price and other factors. So, when there are frequent policy changes by the government without any prior notices to the automobile companies, then it poses a problem as well as a challenge. I think the government should be consulting with people involved in automobile businesses or NADA first, collect their recommendations and think clearly about the outcomes to all parts of economy before making any decisions.
Among global auto trends what excites you? In terms of global trends, customers’ preference is changing. Customers are opting for SUVs rather than sedan. Various companies are manufacturing or researching in compact and micro SUV vehicles which will be of reasonable price. Even in Nepal’s context, owning an SUV was consulted as luxury in the past, but now since there are various segments of SUVs by various companies even at feasible prices, people can enjoy driving an SUV vehicle. This global trend is exciting in terms of development of SUV vehicles.
What is the future for automobile industry globally? The future for anything and especially for automobile industry is innovation. Since most countries are dependent upon other countries for fossil fuels, the prices of fossil fuels are hiking tremendously, and also due to environment factors, almost all of the automobile companies are opting for eco-friendly or electric vehicles.
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