24th September 2025, Kathmandu
Karan Chaudhary, President of the NADA Automobiles Association of Nepal, has emphasized the need to revise the loan policy to increase the sale of vehicles in the country.
Flexible Auto Loan Policy Needed
Speaking at a program on “The Road Ahead for Economic Recovery” organized by the Nepal Economic Journalists Association, Chaudhary urged immediate changes in loan-related policies, especially during festive seasons such as Dashain and Tihar, when automobile sales typically peak. He stressed that addressing the challenges of revenue collection requires revising the loan-to-value (LTV) ratio system.
Currently, Nepal Rastra Bank allows banks to provide up to 60% loans for vehicle purchases. Previously, buyers could take up to 80% loans for electric vehicles (EVs) and 50% for petrol or diesel vehicles. Automobile entrepreneurs have been demanding that the LTV ratio be increased to 80% across the board.
“The government formed in the aftermath of the movement is preparing for elections within six months. The biggest challenge now is revenue collection,” Chaudhary said. “The auto sector has been a major contributor to national revenue. Around 60% of annual auto sales occur during Dashain, but due to the recent unrest, both sales and revenue have declined.”
He further explained that potential customers, instead of purchasing cars, are now saving for essential expenses. Hence, the central bank must immediately amend the LTV ratio policy to create a favorable environment for automobile purchases.
Highlighting the rise of electric vehicles in Nepal, Chaudhary urged the Nepal Electricity Authority to provide transformers to support charging station installations by private businesses.
He also pointed out that Thapathali, Nepal’s main auto hub, was completely damaged during the recent movement. Additionally, the import of vehicles through the northern borders of Kerung and Tatopani has been halted, leaving only the Korala border partially operational, which itself becomes impassable during rainfall due to poor road conditions.
“The government must take road infrastructure improvements seriously,” he said.
According to Chaudhary, Nepal’s auto industry has investments in both two-wheelers and four-wheelers, with domestic production of batteries, tires, and some spare parts already underway. He noted that assembly industries have provided some employment and urged the government to link local industries producing batteries, tires, and other parts with assembly industries through favorable policies.
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