MeroAuto Automotive Conclave 2081: A Vision for Nepal’s Automotive Future

MeroAuto Automotive Conclave 2081, organized by Automotives Pvt. Ltd., set the stage for crucial discussions on Nepal’s automobile industry. Inaugurated by the Minister for Industry, Commerce, and Supplies, Damodar Bhandari, the event brought together key policymakers, industry leaders, and experts to debate the present challenges and future opportunities in Nepal’s evolving automotive landscape.

The MeroAuto Automotive Conclave 2081 was divided into three key sessions:

1. Private Vehicles – Today’s Necessity
2. Public Transport – Problems and Solutions
3. New Destinations for Vehicle Production

Each session presented eye-opening insights, highlighting the pressing need for policy reforms, stable regulations, and investment in technology to transform Nepal into a self-sustaining automotive hub.

Private Vehicles: A Growing Necessity “Automotive Conclave 2081”

The first session, moderated by Sagar Gajurel, Editor of MeroAuto, focused on the increasing demand for private vehicles in Nepal. With over 30 EV importers now present in the country, the shift towards electric vehicles (EVs) was a major talking point.

Yamuna Shrestha, Managing Director of Cimex Inc., emphasized that frequent policy changes in EV taxation and incentives were a significant challenge. She highlighted the importance of developing a reliable charging network and the need for long-term policies that would encourage the industry to thrive.

On the technological front, Dr. Biraj Singh Thapa, Professor at Kathmandu University, shed light on hydrogen fuel technology as a sustainable alternative, especially for heavy vehicles and long-distance travel. He emphasized that hydrogen-powered solutions were rapidly gaining momentum in Nepal in the past 5 years.

Ravi Shankar Saiju, International Trade Expert, highlighted, in the past seven months, automobile and spare parts imports in Nepal have increased by 5.9%, which is 24% higher than the previous year. One of the key challenges in this sector is Nepal’s high logistics cost, which significantly impacts overall import expenses.

For comparison, in India, logistics costs account for 14-15% of the total GDP, and the country aims to increase this figure up to 75% by improving infrastructure and policies. Meanwhile, in China, logistics costs are around 11% of GDP.

When looking at total global consumption, the distribution is as follows:

• India contributes 9%
• China contributes 13%
• Emerging Asia (including Nepal) contributes 10%

India is projecting that its share in global consumption will reach 17% in the next 20 years, while Emerging Asia is expected to increase its share to 15%. This indicates a rising demand for goods, including automobiles and spare parts, in these regions.

Currently, India serves as a major distribution hub for South Asian countries. However, due to the import ban on Indian spare parts, Nepal is forced to source parts from other emerging Asian countries, leading to higher costs.

If Nepal were to develop a local spare parts manufacturing industry, supported by favorable government policies, it could significantly reduce reliance on imports, lower costs, and boost the country’s economy. Encouraging local production could be a game-changer for Nepal’s automotive sector.

However, Dr. Thapa noted a major hurdle: taxation policies. He revealed that while Tata Motors unveiled a hydrogen vehicle in Bharat Auto Mobility 2025, with a price starting at INR 55-60 lakhs, a 450 km range, it carries a 25 ton load. 

The Nepal government imposes a 250% tax on hydrogen vehicles, making local adoption almost impossible.

The discussion also turned towards retaining skilled manpower in Nepal. Many young professionals seek opportunities abroad due to a lack of career growth and financial security. Yamuna Shrestha suggested solutions like better incentives, housing, car financing, and job satisfaction to encourage talent to stay and contribute to Nepal’s automotive sector.

Public Transport: The Roadblocks and Solutions “Automotive Conclave 2081”

The second session, led by Ashish Gajurel, focused on Nepal’s underdeveloped public transport system.

Dolanath Khanal, President of the Central Federation of Public Transport, argued that Nepal’s public transportation policies are outdated. Despite an increase in transit vehicle imports, the sector lacks investment, infrastructure, and stable policies. He questioned whether the government was more focused on revenue generation than actual public transport development.

Hemant Agrawal, CEO of CG Motors, pointed out a major disparity:

• EV public transport requires a 40% down payment, while private ICE vehicles have no such requirement.
• Customs duties on small transport vehicles range from 30-50%, while larger public transport vehicles face 80% taxation, making them unaffordable.

The panel agreed that Nepal’s public transport is among the most expensive in the region due to high import costs and a lack of incentives. Going cashless and offering subsidies for large EV transport were suggested as potential solutions.

Can Nepal become a vehicle manufacturing hub?

The third session, moderated by Rupesh Shrestha, explored Nepal’s potential in local vehicle manufacturing.

Shekhar Golchha, Managing Director of Golchha Group, acknowledged that while Nepal produces some components like batteries, tires, and lubricants, a full-fledged assembly industry requires stable policies, investment, and government support.

He referenced Hulas Autocraft, Nepal’s first assembly plant in Nawalparasi, and noted that seven new factories have emerged despite economic challenges. However, assembling a vehicle requires an investment of Rs 70-100 crore, making it a high-risk venture.

MP Yogesh Bhattarai (CPN-UML) advocated for government procurement of Nepali-made vehicles to boost the local industry. He pointed out that Nepal successfully exports tea, carpets, and chhurpi, so why not vehicles? However, without cooperation from neighboring countries, exporting Nepali-made vehicles to third markets would be challenging.

MP Uday Shamsher Rana (Nepali Congress) echoed the sentiment but insisted on market research before taking big steps. He revealed that Tata Motors had once considered setting up a plant in Nepal but withdrew due to policy instability and market limitations.

The Road Ahead

The MeroAuto Automotive Conclave 2081 shed light on Nepal’s automotive industry’s policy gaps, taxation challenges, and untapped potential. The key takeaways were:

• Policy Stability: Nepal needs long-term, consistent policies to attract investments in EVs and public transport.
• Tax Reforms: High import duties and 250% tax on hydrogen vehicles hinder innovation and adoption.
• Public Transport Investment: Government support for cashless systems, EV subsidies, and reduced taxation can make public transport more accessible.
• Vehicle Manufacturing Potential: With proper backing, Nepal could develop an automotive ecosystem, similar to India’s Maruti-Suzuki model.
• Retaining Skilled Workforce: Creating an attractive work environment with incentives can reduce the outflow of talented professionals.

The discussions at the Automotive Conclave laid the foundation for future collaborations and reforms. The automotive industry in Nepal is at a turning point. With the right strategies, it can drive into a future of sustainability, efficiency, and local production. 

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