NADA Auto Show Triggers Sales

The country’s automobile industry gears up for the 2017 edition of NADA Auto Show. Organized by Nepal Automobile Dealers’ Association (NADA), the annual extravaganza is considered as a platform for sellers, buyers and automobile enthusiasts. According to industry insiders the auto show accelerates the automobile market giving a window of two months during the festivals for automobile traders to reap profits. For consumers, the time is arguably the best with attractive schemes and discount offers besides other benefits. And this itself makes the only auto show in the country a most awaited event every year. “The NADA Auto Show gives a push to the buying spree and hence every company, big or small, looks forward to scaling up their presence,” Chiranjibi Shah, CEO of VG Suzuki, the authorised distributor of Suzuki two-wheelers in Nepal shares. He adds that the automobile market is currently witnessing a slack down and anticipating a strong revival with the commencement of the NADA Auto Show. According to Shah, the auto show brings buyers and sellers under one roof and provides buyers with the opportunity to understand the overall aspect of the machines they are looking for. Almost all major automobile brands available in the country make it a point to participate in the auto fair thus giving buyers also the opportunity to draw immediate comparison among brands.

"Experts share that the earthquake in 2015 followed by trade embargo had impacted vehicle registration severely which shows in the increase in registrations the following year. The other reason behind sales upsurge was excess liquidity in the market."

It is also a time for automobile dealers to find out consumer preference and analyze shifting trends in the domestic market. Interaction with visitors and prospective buyers provides real consumer viewpoint for automobile sellers. At the booths, traders are responsible to keep tab on consumer choice, competition, and ensure attractive product lineup display while dealing with enquiries and closing sales. Those in the automobile business inform that the NADA Auto Show is a perfect event for companies to publicize products being marketed by them and strengthen their brand reputation. Companies today splurge heavily in creating thematic stalls, decoration, lighting, music and other activities to engage the visitors. A stall set up may cost approximately between Rs 2 to 10 million. NADA too leaves no stone unturned to ensure that the stalls are done well. In each category of four-wheelers, two-wheelers and automobile related products, awards are presented each year by the organization as a recognition of their effort in effective display. “The platform over the years has become increasingly competitive and hence it is important for the companies to scale up their presence to make sure that they continue to grab customer eyeballs,” Shah who has been in the automobile industry since past two-decades shared. According to Suraj Manandhar, Chief General Manager, Skoda Division at MAW Enterprises, companies do not mind spending hefty amount to mark their presence at the expo as it is an integral component of branding. “It’s about projecting our brand and making people associate with it in some way or the other. The expenditure definitely pays off in the long term,” Manandhar said. Even though e dealers say that the NADA Auto Show is more about branding than sales, the prospect of the latter too isn’t bleak. The 11th edition of NADA Auto Show held last year posted transactions of around Rs 3.5 billion and recorded 65,000 footfall in just six days. As many as 74 companies had participated in the auto show. There were 125 stalls. Industry insiders say the 2016 edition of NADA Auto Show was among the best with business surpassing expectations by a huge margin. Rs 3.5 billion is a minimal portion of business generated by the annual extravaganza.“A significant portion of sales during the Dashain and Tihar festival is attributed to the NADA Auto Show,” Shah said. “Our officials keep record of interested customers and offer them best deals which helps translating normal enquires during the auto show into sales.” 2016-17 undoubtedly remained the best year for automobile traders with 343,765 units of vehicles being registered at the Department of Transport Management (DoTM), an all-time high record. In the fiscal year 2015-16 the department had registered 239,583 vehicles which is an increment of 43.48 %. In the current fiscal year, as many as 263,817 units of vehicle have been registered at the DoTM in the first eight months. Experts share that the earthquake in 2015 followed by trade embargo had impacted vehicle registration severely which shows in the increase in registrations the following year. The other reason behind sales upsurge was excess liquidity in the market. According to Manandhar, down payment of 20-25 percent was enough for people to purchase vehicles. Likewise, interest rate stood in the range of 6 – 6.5 percent per annum. Given that majority of people purchasing four-wheelers relying on bank loans, it was easy for automobile sellers to make sales. “We were able to surpass the target by around three times in the fiscal year 2016-17,” Manandhar said. The situation this year might not be same as the Central Bank had made it mandatory for buyers to pay 50 percent down payment on total value of vehicle at the time of purchase. Following this provision, the automobile market at current, according to traders, has come down by around 40 percent compared with the same period previous fiscal year. However, NRB has recently ammended the earlier directive. It is now 35% down payment on total value of the vehicle at the time of purchase. Auto dealers, however, are upbeat about the upcoming auto show as it is expected to cut off the market depression. New launches are being planned, schemes are being given final touch and strategy to outdo rivals is being charted. The auto show which has evolved over the years has become one of the most awaited annual events even for the general public. For Bijay Lama, 28, of Dhapasi, the NADA Auto Show is a place to see and experience different products first hand in one place. A major constraint for the auto show in the country when compared with several international shows according to industry insiders is the market size. Even though the scale of the auto show in the country has taken gigantic leap in recent years, it is nowhere close to similar international affairs. However, taking the event to other parts of Nepal is under consideration. While Kathmandu is still a big market for four-wheelers commanding around 60 percent share of the total sales, tables have turned in the two-wheeler category with the capital standing at just 35 percent. Kathmandu’s lead in the four wheeler segment is unlikely to sustain for long as market in Lumbini, Narayani, Gandaki, Mechi and Koshi zones have been showing impressive growth trajectory. With remittance being inarguably a strong contributor to the economy and unavailability of proper public transportation, most people find value in owning at least a two-wheeler.