Loans, choice, spin the wheel
In the early 1980s, it was the Maruti 800 and the Omni van that hit Bhutanese roads and was a prized possession for many.
But now, while Maruti vans and Maruti 800s are still seen, brands like Honda, Hyundai and scores of other makes are taking over. Until 2002, the state transport corporation of Bhutan Ltd. (STCBL) was the only car dealer. STCB sold Maruti cars as an agent at a three percent commission. The choice for Bhutanese customers was opened up when an Indian trading company across the border, Shakti Trading Company became a dealer for Maruti vehicles.
Soon authorised distributors for Maruti, Hyundai, Honda, Kia and Chevrolet sprung up both in Bhutan and in the border town of Jaigaon. The competition among the dealers and the variety of cars to choose from has fueled the rush for cars.
Owning a car remains a goal for many Bhutanese. Those who owned scooters or motorbikes are now buying cars and those driving small and inexpensive cars are upgrading to more expensive cars.
Kinlay Pema, a corporate employee who owned a Maruti 800 switched to a Hyundai Santro recently. “With many new models today, I didn’t want to drive the same car,” she said. A rising middle-income group, changing lifestyles and foreign trips like long-term studies are attributed for the huge demand for cars in most developing countries. Experts, however, say the main factor in Bhutan is the availability of vehicle loans from the banks.
Both Bhutan National bank and Bank of Bhutan provide vehicle loans at an interest rate of 12 percent a year for government and corporate employees and at 14 percent interest rate a year for private individuals. Other financial institutions also provide different type of loans, which people use to buy vehicles.
An employee of Durga automobiles, in Jaigaon, which deals in Hyundai vehicles said that their Bhutanese customers mostly opt for Santro cars. “A lot of Bhutanese ask about i10 and i20. But these models are cheaper in Bhutan as the tax is higher in India, so they buy from Bhutan,” she said. In a month, around 60 cars are sold to Bhutanese customers, she added.
Bhutan Hyundai offers various models such as Tucson, Santa Fe, Accent, Getz, Sonata, H-1 Bus, i10, i20 and Santro. The deputy manager of Bhutan Hyundai, Pema Loday, in an earlier interview with Kuensel said that on an average, about 500 cars are sold in a year.
Since Dhejung-Honda, Honda motors distributor in Bhutan, opened its international-standard showroom and service centre in Thimphu in December, last year, it has sold about 40- 50 vehicles. Prices of Honda vehicles range from about Nu 700,000 to Nu 1,500,000. The choice includes Jazz, City, Civic, CRV and Accord.
An official from Dhejung-Honda said that earlier people didn’t have much choice. “Today, not only has the market grown, but people have become sensitive towards quality and not just the price,” he said. “Right now, vehicles in Bhutan are used just for transportation as we lack good public transport services. It can be called luxury only when you see the top range cars on the roads.”
Honda’s small car segment, scheduled for launch in 2011, will have around 80 percent components made in India.
STCBL is the only importer of Toyota vehicles and imports cars that cost Nu3.8 million – Land Cruisers. “It’s getting quite expensive for Bhutanese customers although it’s the most desired car,” said the managing director. STCBL is planning schemes like easy car finance and introducing cheaper models from India to compete with other dealers. “To begin with, we will be introducing Toyota Innova,” said the MD.
A total of 42,687 vehicles are registered in Bhutan as of June 2009, with a majority of vehicles from Maruti, according to Road Safety and Transport Authority.
