[M35]

Agni launches Mahindra XUV 500 in Nepal !



Agni Incorporated has launched Mahindra´s new global sport utility vehicle XUV 500 in the Nepali market. On the occasion, the company also inaugurated its new showroom and service center operated by Balazu Auto Works.

Three models of XUV 500 -- W6 2WD, W8 2WD and W8 AWD (all wheel drive) - are available in the market.

The car is available in seven different colors like Satin White, Tuscan Red, Opulent Purple, Neptune Blue, Moondust Silver, Volcano Black and Dolphin Grey.

The company has fixed the ex-showroom price for Kathmandu at Rs 5.3 million (W6 2WD), Rs 5.85 million (W8 2WD) and Rs 6.15 million for (W8 AWD)

1.00 INR = approximately 1.59612 NPR

Source:

[GTO]

All down to steep import taxes. The Tata Nano was launched at Rs. 5 lakh in Nepal (Thread Link)!

[Enigmatic]

Call me sadist, but finally a country that takes its people for a more "royal" ride than India while importing stuff.

P.S. India has a higher import duty to promote homegrown companies. But why does Nepal follow the same ?? Do they have a domestic car industry ??

[manolin]

Originally Posted by Enigmatic

Call me sadist, but finally a country that takes its people for a more "royal" ride than India while importing stuff.

P.S. India has a higher import duty to promote homegrown companies. But why does Nepal follow the same ?? Do they have a domestic car industry ??

They don't (i think there is only one car manufacturer who is terrible). And honestly, there isn't a market big enough to justify. The road coverage in Nepal is really bad, linking only the major cities and semi-rural areas. Most of the rural areas are not even connected. Further, with the low purchasing power, it is just not feasible for a car manufacturer to set up a plant in Nepal. In that case, the entire idea of an import duty fails, because it is not really helping the domestic industry. It should be considered as a enhanced road tax basically.

[RaSing]

I see another reason for XUV's getting stolen from India and being sold in Nepal. XUV owners beware !

[Tapish]

Originally Posted by GTO

All down to steep import taxes.!

I had a different impression all the way. Travelling along Nepal, and having a lot of Nepali friends (studying in Nainital)- I had seen a lot of Toyotas- Hilux, RAV4, Prados et al with the people there.

I was told that since they do not have a domestic industry, taxes on import of cars are basic.

Have Indian cars been singled out?

Best,
Tapish

[n.devdath]

Originally Posted by Tapish

I was told that since they do not have a domestic industry, taxes on import of cars are basic.

Precisely my view too. Also, it could be like most African countries where the import duties on second hand cars older than a certain time period are pretty low making importing them a lucrative deal.

And yes, I to not think the XUV will succeed there at this price competing against imported Japanese SUVs/crossovers.

[M35]

Originally Posted by Tapish

I was told that since they do not have a domestic industry, taxes on import of cars are basic.
Have Indian cars been singled out?
Best,
Tapish

There can't be any exception for any brands, I guess. Going by the car prices of various brands available, the import tax on cars can't be any basic in Nepal. Toyota Fortuner costs over 60 Lacks and even Maruti Alto costs around 8Lakhs in Nepal.

Car Price Nepal

Related TBHP thread here:

[hellmet]

Someone once told me high taxes are a measure to curb extensive motorization of the small nation (and hence congestion and other secondary costs of vehicular traffic).

[amrisharm]

Originally Posted by Enigmatic

Call me sadist, but finally a country that takes its people for a more "royal" ride than India while importing stuff.

P.S. India has a higher import duty to promote homegrown companies. But why does Nepal follow the same ?? Do they have a domestic car industry ??

Originally Posted by Tapish

I had a different impression all the way. Travelling along Nepal, and having a lot of Nepali friends (studying in Nainital)- I had seen a lot of Toyotas- Hilux, RAV4, Prados et al with the people there.

I was told that since they do not have a domestic industry, taxes on import of cars are basic.

Have Indian cars been singled out?

Best,
Tapish

Originally Posted by n.devdath

Precisely my view too. Also, it could be like most African countries where the import duties on second hand cars older than a certain time period are pretty low making importing them a lucrative deal.

And yes, I to not think the XUV will succeed there at this price competing against imported Japanese SUVs/crossovers.

Having lived in Nepal for over 7 years, let me try to answer a few questions being asked here.

Nepal has no motor industry what so ever to speak of except for a bare basic UV maker by the name of HULAS. So why the import duty? simple, there is no organised Income tax collection system in Nepal. If you think Black money is a problem in India, well the situation is much worse in Nepal (percentage of GDP wise). So one of the ways the govt collects taxes is by having high import duty on purchases of luxury goods like cars, houses, TV's, Fridges etc etc. So hence the high import duties on cars as well.

To be fair, The govt applies a uniform tax on all manufacturers from all countries. And the official import tax as of May 2012 on vehicles in Nepal was at 213% and I was told it would go up for 2013.

Second hand import of cars from Japan was big business in the 70's-90's. But in the mid 1990's the Govt stopped that practice because of deterioration of air quality in cities caused by old cars. So these days it makes no economical sense to import used cars from overseas markets.

I feel really sorry for my friends in Nepal. Just to give you an example, a friend recently bought a car which cost him Indian Rs 12 lakhs fifty thousand. And what model do you think he got with that budget? He got a brand new Ford Figo.

Another difference with regards to India and nepal in car ownership is Road tax. There they have to pay road tax annually. Obviously the bigger the engine the higher the road tax and all, and the older the car the higher the tax as well. My Friends 1996 Toyota corolla with a 2000 cc diesel engine costs him around INR 22,000 annually for road tax. My uncles 1993 Maruti Gypsy MG410W with a 999cc engine costs him INR 12,000 as road tax. And my cousins 1972 VW Beetle costs him a wopping INR 35,000 as road tax annually.

Unlike in India, In Nepal you have to pay road tax on bikes annually as well. And the same goes for bikes as well, the older it is the higher the tax. I remember paying road tax of INR 2,700 p.a last year for a korean 150cc bike from 1998.

(Note: All prices and taxes are quoted from info I got from kathmandu. I do not know what the import tax and road tax system is like in other cities of Nepal)

[shankar.balan]

Originally Posted by hellmet

Someone once told me high taxes are a measure to curb extensive motorization of the small nation (and hence congestion and other secondary costs of vehicular traffic).

I can believe this to be true. I was floating about in the Singapore area last week and an old pal of mine shocked me significantly by stating that his Toyota Altis car there cost the equivalent of Rs 50-55 Lacs (Around 120,000 SGD). Road taxes and other such things are really very high there.

[apachelongbow]

Singapore the high road tax makes sense, after all look at the brilliant public transport system there. You can get from anywhere to anywhere by taxis the metro or by bus, and the costs are not really prohibitive.
In-fact a car is not a requirement in Singapore. Now compare this with our great country and apart from increasing taxes, nothing seems to work in terms of public infrastructure.

OT aside, Nepal doesn't have much of drivable roads, connectivity is poor to nonexistent in rural areas and indirect taxation on luxury goods drive the govt budget.

[anujmishra]

I can see few of the unknown car companies in www.nepalwheels.com which sells old cars. Chery, Geely, GWM, Naza etc. One 2008 Hyundai Accent listed for Rs. NC 16 Lakh ~ 10 Lakh INR. That is too much for the car which is very old.
Only the super rich would be able to buy the XUV over there.

[esteem_lover]

Originally Posted by Enigmatic

P.S. India has a higher import duty to promote homegrown companies. But why does Nepal follow the same ?? Do they have a domestic car industry ??

Maybe they can only tax the rich, think about pakistan and SL too. They do not have burgeoning manufacturing sectors too.

Originally Posted by shankar.balan

I can believe this to be true. I was floating about in the Singapore area last week and an old pal of mine shocked me significantly by stating that his Toyota Altis car there cost the equivalent of Rs 50-55 Lacs (Around 120,000 SGD). Road taxes and other such things are really very high there.

When I floated about in Singapore 15 years back, I read ads for the Suzuki Swift (Esteem in India), a hatchback there, for a 100,000 dollars which included 70,000 dollars as Tax (Singapore $ was Rs.25 at that time). Apart from that, everywhere you take your car, parking is very very high, even at your own apartment block. They get to spend about 600-800 dollars a month in parking fees unless they own a condo with a parking space. Like apache said, these high prices and taxes are all meant to dissuade people from owning cars when there is a wonderfully integrated metro and bus service.

[OmThoke]

Originally Posted by RaSing

I see another reason for XUV's getting stolen from India and being sold in Nepal. XUV owners beware !

Hehe very true - or probably people would start importing them from India illegally, just the way Indians bring the Lexus, and Hummers here.

But, glad that we don't have to pay 33L for a machine like Xuv 500 here in India, and we can easily afford a BMW X1, 320, Audi A4, Merc C class or any other premium car at that price