Rising dollar sends automobile prices soaring
KATHMANDU, JUN 09 -
A stronger US dollar vis-a-vis the Nepali rupee has resulted in four-wheelers imported from third countries becoming costlier. With the freefall of the rupee against the greenback continuing, some automobile dealers have even been delaying making fresh imports.
The latest maximum retail price (MRP) published by the Nepal Automobile Dealers Association (NADA) shows that prices of vehicles imported from third countries have increased in the range of Rs 100,000 to Rs 1.3 million each. The government has made it mandatory for auto dealers to issue the MRP every quarter.
The latest tariff shows that prices have increased for brands like Hyundai, Volkswagen, Toyota, Ford, Chevrolet, Subaru, Daihatsu, Nissan, KIA and Perodua. However, prices of autos manufactured in India haven’t gone up except for a few models.
“Sales of four-wheelers are already in a downward spiral. With the dollar rising, prices have gone up in the local market which will further hit sales,” said Rupesh Sharma Bhatta, senior manager, business development and planning at Laxmi Intercontinental, the importer of Hyundai vehicles in Nepal.
The company has revised the prices of the Hyundai Accent, Elantra, Sonata, Tucson and Santa Fe imported from Korea. Their prices have gone up in the range of Rs 200,000 to Rs 700,000 each.
Automobile dealers said sales had dropped 40 percent compared to normal times. “As sales were on a slower side, we are reluctant to hike prices,” said Bhatta. “However, we had to do it due to a significant rise in the value of the dollar.”
Meanwhile, Pooja International, which markets Volkswagen vehicles from Germany, too has increased prices in the range of 15-20 percent. Pooja International’s general manager Bibek Bijukchhe said that the company imports all its vehicle except the Polo and the Vento from third countries. “While most of the cars are imported from Volkswagen’s manufacturing plant in Germany, some come from its plants in other countries,” Bijukchhe said.
Similarly, Go Ford, the importer of Ford in Nepal, has hiked the prices of two models, the Ford Ranger and the Everest. Dipesh Shakya, sales manager at Go Ford, said that prices have gone up in the range of Rs 150,000 to Rs 700,000. Shakya added that both these automobiles were imported from Thailand.
Meanwhile, Arun Intercontinental, the authorised distributor of Maruti Suzuki in Nepal, has also revised the prices of its three models — Maruti-Suzuki Swift, Eco and Omni Van. According to Uttam Gupta, senior sales manager at Arun Intercontinental, prices have been increased marginally following a hike in the price by the parent company in India.
Even though prices have not changed for other Maruti-Suzuki models, Gupta hinted that they could go up by Rs 50,000 to Rs 100,000 in the near future. “As cars manufactured in India use raw materials imported from overseas suppliers, the cost of production will rise which will have an impact on the price,” said Gupta. “As of now, we are holding orders as Maruti-Suzuki India has decided to increase the price in the near future.”
An appreciating dollar has made auto dealers rethink their plans to open letters of credit (LC) for fresh imports. “We want to wait and see for one more month. The way the dollar has been fluctuating has prevented us from opening new LCs,” said Prabal Saakha, managing director, Saakha Group which deals in Geely vehicles from China. He added there was high risk of losses by opening LCs now.
Source: The Kathmandu Post
