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Recommending Electric Car Dealerships in Nepal

Posted: Mon Jul 26, 2010 12:47 pm
by Ganesha
Trading is a much easier business than manufacturing and I know its all obvious to you young entrepreneurs out there. Car dealership in a country like Nepal thus is a great business because:

1. You don't need a huge investment: If you already have some business, are a good communicator with ambition, car dealership (of course a new one, one that is not already in Nepal) is not impossible for you.
2. You don't need a lot of your own money: Person comes to your showroom, likes a car, plunks down 1-2 percent for order confirmation. You take that money, open a Letter of Credit with your bank that automatically gives you around 45 days credit. The manufacturer abroad manufactures the car, sends it to you. You deliver the car to the customer, use the money you obtained to pay the bank and keep your share of the profit and commission after wiring the major amount to the manufacturer.
3. Easy access to dollars (through LC)
4. Financing of the sold car through a financial institution is very much available.
5. And the most important one, you do not have to deal with Nepal bandhs, unruly workers and the benefits, large corporation with a lot of supervisors and managers, as is the case if you had a manufacturing base (for anything) in the country.

Now, with the likes of Porsche, Audi making prototypes of electric car, it is hightime you, as young Nepali entrepreneur grab the dealerships of some very promising electric car makers. Here are some of my recommendations:

1. BYD - Warren Buffet has bought shares of this Chinese company. There is no one in Nepal that has their dealership yet.
2. Tesla Motors - The volume will be low because the cars cost about 100k right now (but are bound to go down) but there still are people in Nepal who ride Mercedes. [I don't know though how the solo BMW Dealer is faring in Kathmandu currently.]

Re: Recommending Electric Car Dealerships in Nepal

Posted: Sat Nov 27, 2010 9:02 am
by saurav
hello, i read few of your articles and i really liked it....i recently read your article about electric cars.i have been trying to get into the industry of being a sole dealer of electric cars for quite a while, i have been doing some research about them as well. Last month i had a partner who was willing to venture into electric cars, hence due to this reason i struggled and finally got a Sole Distribution dealership of a Chinese company producing electric cars, but the problem is the person backed off and i have no fund to invest into it. Its a very good company and i have gone through its audit report and its main areas of market are, Latin America, Europe, Asia, South Africa. It has a very good customer rating and has a very good warranty for its customers and the price of the electric car is very cheap its about 4,000USD. As we are all aware of the import duty in Nepal is very high about 230-260%. still if i will be able to import it still the price would be reasonable around 10-12 lakhs(NRS). I have the sole dealership agreement is it possible to find investors in Nepal or maybe i can hand over the dealership to the investors for a fee. What is the possibility in your point of view? I am currently in Sydney and we have a office registered in Kathmandu. I have gone through BYD and the car prices there are expensive, cheapest you'll find for about 8000-10,000 USD. Compared to BYD this is a very cheap EV with quality and good customer ratings.

Reva that has been manufactured in India is also expensive in Nepal's market as its price is about 15lakhs NRs.

If i would want to go ahead with my ideas of finding investors, how would i get hold of them and find them? Please advise.

Regards,
Saurav

Re: Recommending Electric Car Dealerships in Nepal

Posted: Sat Nov 27, 2010 1:26 pm
by Ganesha
Saurav, welcome to aawartan. We are glad you were able to find value in what aawartan has to offer. I will respond to your question in pointwise fashion.

1. There are not many car dealerships in Nepal. I suggest thus the best way to figure if they are interested in buying your dealership or partnering with you would be to give them a phone call. It might be difficult to get hold of the right guy in the dealership (proprietor/owner) the first time you call them but once you get hold of her/his mobile phone(s) (all of them definitely have it) and make a 30 second pitch (as to what you are trying to do and why you need her/his attention), you should be able to get a decent conversation going.

2. There is a car dealership association in Nepal (called Nepal Automobile Dealers' Association) and they have a website. You could start doing your homework from there.

3. You could also go through the member list in the website of Federation of Nepalese Chambers of Commerce to find potential suitors. You could look at their current portfolio, make a list of potential entrepreneurs and go from there too.

4. If you want to spend a little money, advertise on one of Nepali Dailies and see the responses.

5. If you want to try the interest of young entrepreneurs of Nepal in your venture, you can find the organisation and the list of members here. This would probably be something I would advise you to look into, first.

6. You might also want to contact Ujwal Thapa, a young entrepreneur, an activist in Kathmandu. He does a lot of great things in raising entrepreneurial awareness in Nepal and holds regularly, meetings with some good Nepali businessmen/entrepreneurs every month. I am sure he could give you some good leads. Here is his facebook page and his blog entitled "Why Nepal".

Hope that helps. I know other aawartaners will have more to add. Keep us updated.

Re: Recommending Electric Car Dealerships in Nepal

Posted: Sun Nov 28, 2010 9:41 am
by kazi
Electric cars in Nepal sounds great to me.. only if electric power services would be a little more reliable this business has big hopes. Accolades to @saurav for taking on this entrepreneurial spirit. I am not able to help you since this is not my field of specialization, but I wanted to say that I think highly of your venture. Best wishes to you.

Re: Recommending Electric Car Dealerships in Nepal

Posted: Mon Nov 29, 2010 1:28 am
by Parash
The way Ganesha has written makes everyone wanting to start car business feel like its a piece of cake. I might sound like i am criticizing, but its this way.

We do need limits for issuing LC, and for cars you need a good one!! We do need to order 3-4-5 cars atleast at one time, we again need 5-10 % margin for the LC, which isnt a big deal, but how about the 200% + tax/customs you need to pay as cash to the customs dept at Birgunj/ or any other port while bringing in the cars????

Take an example, we r importing 5 cars each of 10000 dollars, issuing the lc might be almost impossible without a good LC limit or exposure to the banks, you need to provide atleast some collateral, or all the partners/directors should have some existing business with extremely good rotation, profitability and relations. Cash margin to issue the lc is just around 5-10%, depends on how you negotiate it with the bank. But then, when the cars arrive at the customs, you need to have 220-230% of the cars value, i.e in this case, around $115000. Having an existing business is just a mere plus point, but not the solution!


Lastly, who would pay for someone elses distributor rights in Nepal. unless the brand is very good, or has a very high profitability or is a very new and unique kind of product?? Of course it has a good future! Saurav ji needs to find some of his good friends, maybe 3-4 in nepal, and start small for now. i guess thats the easiest way if he wants to remain in business. Sooner or later someone else will find the company, and take away the dealership, since you arent in a state to be able to start this business. Find some friends, friends of friends and start it. It should do good in some months.

Re: Recommending Electric Car Dealerships in Nepal

Posted: Mon Nov 29, 2010 8:42 am
by kazi
A couple of points to take here:

1. Most definitely LC does not grow on trees. And there are constraints on obtaining one, *legally* I might add. I have to agree with @Parash that the process should not be over-simplified.

2. If people can afford a Mercedes, it does say something about the community: There are people with big money. And even if 115,000 $ sounds like a lot of money, if that is the case then the amount itself is chump change really, following @Ganesha's line of reasoning. In other words this means there are investors out there, and this also means there are buyers also. In this respect, if investors can see a return I see no reason why the cost of EV (base price + 230% tax) should be a hindrance to business as long as there are buyers.

3. I think we should also distinguish between the EV and the *hybrid*. I think the purely electric powered vehicle could not be sustainable with our unreliable electric power services. I think *hybrid* has good scope with increasing fuel prices and what not. In fact I think the *hybrid* is totally suited to the needs of drivers in Nepal... who would need to drive faster than 50mph with the infrastructure such as ours? I think someone who knows about this stuff could come up with facts and figures to compare vehicles using electric, petrol, diesel and *hybrid* power.

4. Perhaps I lack the so-called business acumen. But I really do not understand what @Parash means by
Saurav ji needs to find some of his good friends, maybe 3-4 in nepal, and start small for now.

From what I understand this business will survive only with a large supply and demand. For larger success, I would think bigger. I might be missing some vital clues here. And our readers might appreciate your further input too.