KATHMANDU: The Nepali automobile market is experiencing a surge of new entrepreneurs attracted by quick profits and fewer complexities compared to other sectors.
While industries such as manufacturing, tourism, agriculture, construction and hydropower require significant infrastructure and years to break even, automobile trading offers faster returns, often within two to three months, say entrepreneurs. This has made the sector highly appealing to investors.
The rise of electric vehicles (EVs) since 2018 and simplified import procedures have further increased the entry of new players. With no mandatory requirements for after-sales service or spare parts availability, anyone can import and sell vehicles.
Under the Finance Act, only official dealers or authorized agents of vehicle manufacturers can import new vehicles into Nepal. This has led to a noticeable increase in the registration of import agencies.
According to the Department of Commerce, Supplies, and Consumer Protection, 197 import agencies have been registered as of July 2 of the current fiscal year. Most of these are involved in the automobile business. A total of 2,659 import agencies have been registered with the department so far.
The rise of electric vehicles (EVs) since 2018 and simplified import procedures have further increased the entry of new players.
“Motor vehicles cannot be imported without registering an agency with the department. We have seen a surge in agency registrations in recent years,” Bharat Acharya, the information officer at the department, told MeroAuto. “Some loopholes in the law have allowed unchecked imports; import a vehicle, sell it, and make money with no obligation for after-sales service or spare parts. We believe this practice can be controlled by implementing clear standards.”
Automobile Imports Being Tightened
The Department of Transport Management (DoTM) is preparing to enforce stricter import standards for automobiles. The DoTM has prepared a draft directive for automobile imports and circulated it among stakeholders for feedback.
The proposed directive requires importers to obtain prior approval from the department and ensure they have adequate service centers, tools, equipment and technical staff. Importers must also guarantee after-sales service and the availability of spare parts. Likewise, only motor vehicles with a minimum ground clearance of 180 mm and compatibility with Nepal’s terrain and ISO 8608 road surface conditions can be imported.
For EVs, four-wheelers must have a minimum range of 300 km on a full charge, and two- or three-wheelers must have at least 100 km. EV batteries must last at least seven years or 3,000 charging cycles and meet UL 2580, IEC 62133, AIS 049, or IS 17017 safety standards, including proper thermal management.
Additionally, only motor vehicles meeting Euro 5 standards (two- and three-wheelers) and Euro 6 standards (four-wheelers) can be imported into the country.
