Vehicle registration slumps further

KATHMANDU, June 4: In what may be called a clear indication of lack of consumer confidence in the market, registration of private vehicles has fallen further during the period between mid-April and mid-May.



The period recorded least sales in the current fiscal year 2010/11 for two-wheelers indicating a feeling of insecurity in the middle class and upper middle class of society. Also, the sales of four-wheelers has also declined during the period. [break]



According to figures provided by the Department of Transport Management (DOTM), sales during mid April-mid May contributed to only 5.56 percent of the total sales in 10 months of the current fiscal year. The registration of two wheelers during the period between mid-April and mid-May was 6,072 units which was 8,179 units during the period between mid-March and mid-April.



Registration has fallen by 25.76 percent compared to last month´s. Altogether 14,652 units of two-wheelers were registered during the period between mid-August and mid-September in current fiscal year.



Even though different vehicle dealers provide different reasons for the declining sales, everyone agrees that political instability, ´unexplainable´ increase in excise duty and fuel shortages are some of the basic reasons for the fall in sales and registration. Despite many attractive schemes provided by dealers to grab the attention of customers, the declining sales registration data explains that they are not very successful in selling their products.



"The decline in sales in likely to continue for a few more months if any urgent action is not taken by the government," said Saurabh Jyoti, the president of Nepal Automobile Dealers´ Association (NADA). He blames the government´s decision to increase tax and the 10 years old transport policy of Nepal as the main reasons behind the sales slump. However, the transport policy is being revised by the Ministry of Labor and Transport Management.



Similarly, in case of four-wheelers, the number of vehicles registered during mid-April and mid-May was 531 units whereas it was 754 units during mid-March and mid-April. The period between mid-November and mid-December saw sales soaring to 948 units and sales dropped to 356 units during mid December and mid January. The government had increased excise duty for vehicles in November 20.



Currently Nepali automobile customers need to pay 240 percent tax for four wheelers. "Automobile sector is one of the highest tax paying sectors in Nepal and last year we paid Rs 44 billion in taxes. This year the sales has decreased by 40 percent which means the tax revenue of government from automobile sector will decrease by Rs 16 billion," added Jyoti.

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