Budget tax hike shoots up motorcycle prices

Wednesday, June 13th, 2018 | | Money

The fallout from the government’s budget has now reached Nepal’s two-wheeler market, as popular motorcycle brands begin hiking prices following a steep rise in excise duty and road construction duty.

The sole distributor of Bajaj motorcycles in Nepal, Hansraj Hulaschand Co (HH), and Jagdamba Motors, authorised distributor for TVS motorcycles and scooters, have already revealed their new price lists. They are categorised as pre-budget and post-budget prices.

Currently, both companies are selling their products at pre-budget prices and will continue to do so until the next lot of two-wheelers are imported. According to an HH official, their post-budget prices are tentative. The exact prices will be known after customs clearance of the new lot, the company said.

Their price hike ranges from Rs4,000 all the way to Rs129,100. For the Pulsar NS 200, one of their best-selling models, the price has been tentatively jacked up by Rs34,000. And for the Dominar 400, a value-for-money power cruiser, it will cost Rs599,000 instead of the relatively affordable Rs469,900 pre-budget.

KTM, another brand that is popular among Nepali youths, has also hiked up their prices. Compared to Bajaj though, they have not increased their prices by an astronomical amount. The price of their latest model, the Duke 250, has been hiked up by only Rs5,000 while the 390 Twins has become dearer by Rs15,000. The Duke 200 gets a price hike of Rs9,000 and now costs Rs464,900.

TVS has also revealed their proposed price list with price hikes ranging from Rs5,000 to Rs33,000. Their current flagship model, the Apache RTR 200, will cost Rs33,000 more while most of their scooter lineup and commuter bikes will get a Rs5,000 bump in prices.

In a bid to increase revenue, the government has increased the excise duty on motorcycles depending on their cylinder capacity (CC) from 50 percent to up to 100 percent. Another cost that has gone up is ‘road construction duty’ that is levied on motorcycles. Motorcycles in the 151cc to 250cc segment will now be charged Rs18,000 instead of Rs12,000, a 50 percent hike. For motorcycles in the 251cc to 400cc segment, it is now Rs50,000 instead of Rs15,000, a hike of more than 230 percent.

And those thinking about buying a motorcycle above 401cc should steel their hearts and wallets, as the road construction duty for this segment has jumped from Rs20,000 to a whopping Rs200,000—a 900 percent increase.

While motorcycle companies in Nepal are scrambling to update their prices, some on the other are taking a relaxed approach. Honda Nepal announced that they would not increase the prices of their bikes and scooters until the new lot arrives while Royal Enfield will reveal their new price list next week. Other brands such as Suzuki and CFMoto have yet to confirm their new prices.

Ramesh Danekhu, senior media officer at Morang Auto Works, said Yamaha Nepal had yet to increase the prices of two-wheelers. “Discussions on this matter have not been held. But it is likely that we will increase prices before the start of the next fiscal year which begins mid-July.”

Combined with increasing petrol prices, it will get increasingly difficult for people to own and ride two-wheelers in Nepal. Most people rely on such vehicles to get to work due to unreliable and unsafe public transport.

On the other hand, the second-hand market for two-wheelers should experience a boom as more people opt for pre-owned vehicles instead of buying new ones. The silver lining is that while you may recoup more money when you sell your old motorcycle or scooter, the small gain will be insignificant when you walk up to a showroom and ask for the price of a new scooter or motorcycle.