The prices of Indian cars sold in the Bhutanese market is poised for a hike with the Indian government announcing an increase in its central excise duty.
According to an article in the Times of India, cars manufactured by India’s largest car manufacturer, Maruti, will see a 2% price hike while the popular Hyundai cars will get costlier by Rs 6,500-Rs 25,000.
The general manager of Zimdra automobiles, Karma Choden, said that the company has received no confirmation on the price hike.
She agreed that price plays a decisive role in Bhutanese’s choice of cars since a majority of them were not affluent.
Hyundai’s general manager, Pema Lodey, also said that he was unaware of the price hike but if it affected every car, it would not really affect his sales.
“But the overall vehicle demand may slump,” he added.
Asked if affordability affected the market, he said that some customers are price sensitive hence competition exists in the low value vehicle category where prices range from Nu 300,000-Nu 400,000 but not much in the Nu 700,000-Nu 800,000 price bracket.
“Here customers look for designs, features and comfort,” he said.
In the last two years Hyundai has sold around 600 cars in Thimphu, the Indian ones costing Nu 273,000-Nu 585,000 (including sales tax) while the Krean ones cost anywhere between Nu 500,000 to Nu 1,100,000 (excluding tax).
On an average, 4-5 of Maruti cars are sold daily in Thimphu.
Karma Choden said that the feedback so far has “been positive” without a single complaint while Pema Lodey said that his customers are quite happy because they offer value for money.
However, he said that a problem that dealers face keeping a stock of spare parts replenished due to financial and logistical constraints.
The market for Hyundai, he said, has remained steady and the demand this year was the same as last year’s. Unless the dealer failed miserably the manufacturers will not review their dealership.
“But of course, they set targets based on the overall market situation in the country”, he asserted, “and right now we are doing fairly well.”
Zimdra automobiles also said it is doing extremely well.

By Peky Samal
in THIMPHU