Around 3-4 years ago, consumers could easily purchase any entry-level cars such as Maruti Suzuki Alto, Datsun Redi-Go, Renault Kwid, Hyundai Eon under 20 lakhs in Nepal. However, the scenario has drastically changed in recent times.
Even while buying an entry-level car in Nepal, customers require to empty their pockets nowadays. For instance, after the production of Hyundai’s popular offering Eon was discontinued, its other popular model Santro entered the market. Sadly, it arrived with a starting price of 24 lakhs in Nepal.
Seemingly, models such as Ready Go and Renault Kwid, which both adopted an 800cc engine are also no longer imported in Nepal. This has also resulted in the lack of entry-level cars in Nepal under Rs. 20 lakhs.
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Currently, only the standard variant of the Maruti Suzuki Alto 800 is available for under 20 lakhs in Nepal. Consumers looking for upper variants and models require more than 23 lakhs, even to bring home an entry-level car. This has resulted in shattering the dream of a middle-class person to purchase a new four-wheeler.
What’s the crucial reason behind the sudden hike in car prices in Nepal?
Primarily, the major reason behind the hike in car prices in Nepal is non-other than the Government imposed tax on vehicles. Besides this, the recent increase in the price of steel, plastic, and other raw materials required to assemble a four-wheeler has also resulted in a sudden price hike.
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What amount of tax should we pay while importing cars in Nepal?
Currently, the Nepal Government has been imposing 80% customs duty and up to 80% excise duty on the import of all types of cars. However, cars below 1000cc are subjected to 80% customs duty, 40% excise duty, 13% VAT, and 7% road construction fee. This hefty amount of tax on four-wheelers has resulted in us paying more than double the actual price of the car.
More than 92 percent of the cars imported to Nepal are imported from India. In the last 3 years, the Government of India has made extensive changes in pollution standards and safety standards, which has led to an increase in vehicle production costs. The new safety standards imposed by the Indian government require the car to have safety features such as ABS, EBD, and at least two airbags. This has also played a vital role in the increment.
Moreover, vehicles these days arrive with upgraded features and engine performance that further increases the suppliers’ manufacturing costs.
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According to Indian Auto News Reports, the new pollution standards, which have been in place since April 2020, have increased the prices of cars by 5-10%. Accordingly, when these BS6 standard cars started rolling out in the Nepali land, it increased the ongoing MRP of cars in Nepal.
Currently, the import of 2021 model cars has also been started in Nepal while the carmakers are all set to revise their price list. This, in fact, is further adding more financial burden to the customers in the near future.
