NADA show setting the benchmark for domestic automobile sector

KATHMANDU, Sept 4:

NADA Auto Show -- the country´s premier automobile show -- has been a benchmark for the developing and strengthening of the automobile market of the country.

Traders say the annual event has not just provided stakeholders with an opportunity to brand their products, and share prospects and challenges about the sector, but has also helped pave new prospects -- like assembly plants and manufacturing industry -- in the country itself. [breeak]

Auto dealers say the annual event, which began in 1998 as a once-every-two-years event and then turned into an annual event on 2011 -- has been a crucial role-player in the current growth of the automobile market in the country.

"The NADA Auto Show has proven to be the major role-player in enhancing the development of the automobile sector here in terms of participation of stakeholders, number of enthusiasts in the show and the entire business," Shekhar Golchha, the president of NADA says. "The show has been a milestone event that has lately led stakeholders to even think of assembly plants in the country."

It is the NADA Auto Show that has made people think about prospects of an automobile industry inside this country thereby forcing stakeholders to think of assembly and manufacturing plants in the country as well."

Golchha says the auto show has succeeded much in terms of garnering support from visitors and exhibitors and getting business. He says the show has been able to incorporate participation from almost all automotive companies here in the couple of years, along with an average footfall of over 50,000 and business worth Rs 1 billion every year.

According to NADA, the number of participants in the first edition of NADA Auto Show was 26 exhibitors. Exhibitors´ numbers have kept on going up each passing edition with 40 in last year´s -- that is the eighth edition, and 53 in the ongoing edition of the show.

NADA officials, participating in a round table with Republica last week, said total turnover during the auto shows these years surpasses monthly turnover of many participating companies, while the turnover during season of Dashain and Tihar makes up around 40 percent of their annual turnover.
Golchha also says the annual growth rate of the domestic automobile market, which was nominal during the inception of the auto show, has now reached around 15 percent, with the country importing vehicles worth Rs 40 billion annually.

Similarly, data compiled by the Department of Transport Management (DoTM) shows that overall registration of vehicles in the country increased by 68 percent in the last five years to 1,702,732 units at the end of Fiscal Year 2013/14.

In the meantime, the government has also urged the private sector to go for assembly plants in the country itself first and then to look into developing a manufacturing industry in the long run.

Finance Minister Ram Sharan Mahat, while inaugurating this year´s auto show in the capital on Wednesday, even vowed to provide the private sector logistic support in this regard.

TAX REVISION, PROPER EXPO VENUE URGENTLY NEEDED

Dealers have pointed out the need to revise existing tax and customs rates imposed on automobiles and also for a separate venue to conduct the auto show and other such events as the primary need for country´s automobile sector to develop.

"The state has been charging around 241 percent under different headings on automobiles making them much costlier. The rates should be revised as soon as possible so that the middle-class can have access to automobiles," Saurabh Jyoti, the immediate past president of NADA, says. He believes that once vehicles are cheaper, automobiles will have higher penetration in the country, and thus, will contribute more to the national economy.

Jyoti, who is also the chairman of Syakar Trading Company -- the authorized distributor of Honda four-wheelers for Nepal -- also says the state should allocate land allowing private sector to construct larger exhibition halls. "Along with the NADA Auto Show being larger and standard every year, we have been facing a space crunch," Jyoti says. "The effectiveness of a show and its contribution to the overall growth of the industry will be substantial with larger venues."

LET AUTO MARKET GROW MORE BEFORE GOING FOR ASSEMBLY PLANTs

Dealers have also expressed that the domestic automobile market should first be strengthened before approaching the idea assembly plants.

"The domestic automobile market is growing significantly these years. However, it should be allowed to grow further for some time before thinking about setting-up assembly or manufacturing units here," Gopi Neupane, the general manager of CG MotoCorp -- the authorized distributor of Maruti Suzuki, says.

Echoing Neupane, Anjan Shrestha, the executive director of Laxmi Intercontinental -- the authorized distributor of Hyundai vehicles for Nepal -- says the government´s perception toward the automobile sector and dealers has to change before going for establishing of assembly plants here. "The automobile sector has been taken as major source of revenue by the government," Shrestha says. "The state should not take vehicles as luxurious goods; it has become a basic need for people these days. Vehicles have to be made affordable by reducing the taxes first."

Source: Republica