NADA urges immediate loan policy revision to boost vehicle sales

KATHMANDU: Karan Chaudhary, Chair of the Automobile Association of Nepal (NADA), has called for urgent changes to the country’s loan policies to stimulate vehicle sales.

Speaking at the ‘Path to Economic Revival’ program organized by the Nepal Economic Journalists’ Forum, Chaudhary emphasized the need to adjust the central bank’s “loan-to-value ratio,” particularly to support vehicle trade during festive seasons.

Currently, the central bank allows up to 60% financing for vehicle purchases. Previously, the limit was 80% for electric vehicles (EVs) and 50% for petrol/diesel vehicles.

Auto industry representatives have long sought an increase to 80% across the board.

Chaudhary noted, “With elections planned within six months by the government formed amid protests, the biggest challenge now is revenue collection. The auto sector has traditionally been a major contributor. However, protests have led to a sharp decline in vehicle sales, especially during the festive season when 60% of annual sales usually occur. Customers are now prioritizing essential expenses, which further reduces revenue. The central bank must immediately revise the loan-to-value policy to encourage vehicle purchases.”

He also highlighted the growth of electric vehicles in Nepal, urging the Nepal Electricity Authority to provide transformers for EV charging stations.

Chaudhary reported that the Thapathali auto hub has been severely damaged due to recent protests, and vehicle imports through northern border points such as Kerung and Tatopani have been disrupted.

Chaudhary pointed out that both two- and four-wheeler industries are attracting investment in Nepal, with local production of batteries, tires, and some spare parts underway.

He urged the government to integrate locally produced components with assembly industries, which have created employment opportunities.

The NADA president stressed that the recent unrest has negatively impacted the auto sector, with damage to Thapathali and disruptions in imports posing significant challenges for industry recovery.