Nepali Times
Autos and the upwardly mobile

The Dugar Group has been representing some of the leading automobile brands for the last 30 years. Chief Operating Officer Vaibav Dadha spoke to Nepali Times about the changing scenario and competition.

Nepali Times: How has your business evolved?
Vaibav Dadha:
We have been in automobile trading for the past 30 years. We started off with Volkswagen in 1974. Today we are dealing with 10 brands including Nissan, Volkswagen and Audi. We recently set up a state-of-the-art centre last year, which is one of the best-equipped in Nepal.

What has support from the government been like?
It is a very volatile trade. It all depends on the government's policies. In fact last year there probably was a 200 percent increase in the passenger vehicle sector with new Marutis joining the taxi service.

What are the necessary changes needed?
Information dissemination still needs to improve in Nepal. Anywhere else in the world, information is passed on a regular, monthly basis and a very transparent business is done. But in Nepal it is not so, everything is hidden and it's not a very free trade policy. There is no authentic data. Only one data comes and that is from Nepal Automobile Dealers Association and this too is only once a year. That's not sufficient. It should be transparent, more frequent and every importer or the government should provide details on a company wise basis.

Has the market grown?
With the opening of finance and banking sector in the last three to four years the market has drastically improved. It is not very complicated for people who want to procure a vehicle now to do so. The financing is fairly straightforward. That's one of the reasons the graph is going up. There is a shift from motorcycle to four wheelers.

Will the competition especially from China be an influential factor in the future?
Competition has been growing. There are more and more brands coming in from China but Chinese brands for two and four wheelers have suffered because of poor after sales. As of now about 80 percent of the market is dominated by Indian brands. Subsequently I believe all the Indian brands are going to be doing very well here.

There seems to be a growing interest in Royal Enfield motorbikes?
We have appointed dealers all over Nepal and are providing backup with regard to servicing parts and easy financing facilities to customers. Royal Enfield is a dream bike and it has become easy for people to shift from a Bajaj or Honda to an Enfield.

Considering the present state of economy is there scope for growth in the luxury car segment?
Nissan has been doing very well. In fact in the passenger vehicle segment Nissan has been the number one for the past three years. We have just started marketing Nissan in the commercial segment where we are sure in a short span of time we will do well. People are going to be surprised because though the economy has not been doing well, sales in this category has been moving upwards. One of the safest options to invest in for banks is higher purchase loan for a vehicle. The money is very secure. I think that the finance is going to open up more in the coming days considering that they are asking for the guarantee of the distributors.

Have you identified other sectors in Nepal where the industry could grow?
In Kathmandu Valley the sales has been on the up trend. However with the current scenario in Nepal for people outside Kathmandu the situation has not improved to be investing in automobiles. The growth prospect is tremendous.

(11 JAN 2013 - 17 JAN 2013)