Kathmandu — Nepal’s automobile sector has urged immediate reform in loan policies to revive sales ahead of the Dashain and Tihar festivals. Speaking at a program organized by the Nepal Economic Journalists Association on “The Road to Economic Recovery,” Karan Chaudhary, President of the NADA Automobiles Association of Nepal, said the Nepal Rastra Bank must revise its loan-to-value (LTV) ratio to encourage vehicle purchases.
Auto Sector’s Role in Revenue Collection
Chaudhary noted that the automobile industry has been one of the largest contributors to government revenue. Traditionally, nearly 60 percent of annual vehicle sales occur during Dashain and Tihar. “The biggest challenge now is revenue collection,” he said. “The auto sector used to play a major role, but sales have fallen sharply due to political unrest and restrictive loan rules.”
Loan Policy Reform Urged
Current policy allows buyers to finance up to 60 percent of a vehicle’s cost through bank loans. Earlier, loans were capped at 50 percent for fuel-powered vehicles and 80 percent for electric vehicles.
Dealers are now demanding that the ceiling be raised back to 80 percent. “Customers are prioritizing household expenses over vehicle purchases,” Chaudhary explained. “Without immediate policy reform, the market will remain stagnant.”
Electric Vehicles and Infrastructure Gaps
He also highlighted the rising demand for electric vehicles but said infrastructure has not kept pace. Dealers have asked the Nepal Electricity Authority to provide transformers to set up charging stations across the country.
Chaudhary pointed out that Nepal’s main automobile hub in Thapathali has suffered heavy losses during recent protests. Northern trade routes through Kerung and Tatopani remain blocked, while the Korala border route becomes unusable during rainfall. “The government must prioritize road repair and upgrades,” he stressed.
Nepal’s auto industry is also seeing new investment in two-wheelers and four-wheelers, with local production of batteries, tires, and spare parts already underway. Assembly plants are generating jobs, but Chaudhary called for government policies to connect domestic production directly with vehicle assembly.
