Excise duty hike makes bikes expensive

KATHMANDU, Nov 23: With the increase in excise duty, the price of two-wheeler has gone up by as much as 10 percent. Though revised excise duty will be applicable only for new imports, auto dealers have raised prices of their existing stock as well.

The government through the budget for fiscal year 2010/11 had raised excise duty in two-wheelers by 10 percentage points to 40 percent.

Dinesh Ratna Bajracharya, manager of Syakar Company said the rise in duty will affect the customers. “Our public transport system is very worse. When duty is raised this heavily, it will surely become troublesome for customers,” Bajracharya, said, adding that the rise in duty will not affect sales much. He also expressed dissatisfaction over hike in duty as bike is one of the most convenient means of transportation for middle class people.

Syakar Company - the authorized distributor of Honda and Hero Honda motorcycles -- is the market leader in two-wheelers segment.

Ashish Sharma, showroom manager of Hansraj Hulaschand and Company - the authorized distributor of Bajaj bikes, said the rise in duty will make temporary impact in the sales.

“As the price of two-wheelers sold by every other company will increase, I don´t think it´ll make a big difference in sales. The sales will slowdown a bit for a week or two, as people will have to arrange more cash to buy the same bike," he said, expressing hope that the duty rise will not affect the sales.

Suraj Manandhar, deputy general manager of motorcycle division of Morang Auto Works (MAW) - the authorized dealer of Yamaha bikes, also said duty rise will not affect the sales much. “It´s not that we are charging extra for our benefit, the increased amount goes into the state coffer,” Manandhar said. “I don´t think this will affect our sales," he explained.
MAW, however, has yet to adjust the prices in tune with rise in excise duty.

The government has also raised excise duty on two-wheelers (cars, jeeps and vans) by 10 percentage points to 60 percent. Though the increase in price will not make big impact on the sales of two-wheelers, it will surely affect the sales of four-wheelers.

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