Desperate Vehicle importers ask for Govt intervention

Vehicle importers meet at the BCCI Hall

Import ban on vehicles/heavy equipment

While neither the government nor the central bank provided any clues on the vehicle ban, vehicle importers in the capital met again at the Bhutan Chamber of Commerce and Industry (BCCI) conference hall yesterday to discuss serious on-going issues caused by the Indian Rupee (INR) shortfall followed by the liquidity crisis and the import ban.

Members at the meeting expressed severe impact on respective businesses in the aftermath of the import ban and non-availability of loans with commercial banks. Owing to a sharp increase in overhead costs and less turnover, many have already initiated retrenchment and cost cutting measures while some are on the verge of closing shop.

However, the liquidity crisis according to bankers is likely to prevail for the next few years while there is no plan as yet to lift the import ban.

Ugyen Tshechup Dorji of Zimdra Automobiles, who is also the president of the Construction Association of Bhutan (CAB), said central bank officials revealed that the import ban may not be lifted for another year.

He said the companies could have managed its operational costs for a few months by utilizing its reserves even with zero growth but is not possible now as reserves are almost exhausted. “It’s been almost eight months and they are saying it will take another year.  We are retrenching people and a lot of people are being transferred to other places.”

General Manager of Ugen Earthmovers, Kash Chhetri said 15 employees from her company are being laid off and the company’s branch in Gelephu has been shut down. “We thought the situation would improve but we have been running on losses,” she said.

She said while stocks worth millions are lying unsold, there are cases where sold products have been returned as the customers couldn’t mobilize funds from the banks. “We had to accept it back at last.”

She said her company has already started defaulting on loans with the banks and she feels like the situation will continue.

Ugyen Tshechup also reiterated on his earlier request that the government provide a time frame on the ban which was imposed as an interim measure. “We said we understand the problem of the government and the need to ban imports and loans but we don’t want to work in a vacuum, we wanted to know a definite time line which they (government) didn’t provide.”

The government and the RMA had taken immediate interim measures by banning import of unessential commodities, housing and vehicle loans, in March this year as it was perceived that excessive credit had fueled the INR shortfall.

Car dealers were hopeful again when the government later resolved to impose an additional 20% green tax on vehicles above 1,800 cc and 5% tax on vehicles below 1,800cc during the last parliamentary session.

However, importers at the meeting yesterday vented that the tax policy doesn’t serve any purpose with zero imports and the ban still in place.

Palden Tshering of Chundu enterprises said a lot of investments made are turning out to be going astray.  “Showrooms were part of the required set-up. Likewise we have made huge investments while setting up and we need to know how to pay back the loans with banks,” Palden said.

Some others said it’s already posing to be a liability as a major source of investment money included bank loans for which dealers are currently making monthly payments.

Almost all importers at the meet cited various other issues such as mounting pressure from foreign partner companies with regard to business performance and even more pressure from commercial banks with regard to loan re-payment.

Car dealers said the government and BCCI must intervene because the central bank is adamant and worried only about deficits and not about the repercussions of the liquidity crisis and import bans.

The meeting concluded with all the importers resolving to submit all the details including figures with regard to the impact of the import ban and credit issue till date.

Importers, within a week’s time will put forward to the chamber, figures related to losses incurred, retrenchment, tax payments made, outstanding liabilities such as loans with commercial banks among others which BCCI will then take up with the government.





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  1. Bunch of selfish people….I expected these people would support the economy during the hard times but it is evident that their intentions are to drag down the economy further.The country is going through rough times and they are concerned about their showrooms and spare parts…as if the dealership business is the lifeline of our economy.I rather qualify such business as liability to Bhutan and big drainer of our country’s resources especially at this juncture…it is very sad that these people are still ignorant on the gravity of the problem our economy is going through……pathetic bunch of loosers

  2. i second the above thoughts….

  3. I totally agree with Citizeniii. If fact business houses enjoying facilities such as commissions r partly responsible for all economic crises. All these brand of vehicles can easily be purchased without having to involve unneccessary agents and the direct taxes can be paid while registration with RSTA.

  4. the maximum number of vehicle sales in bhutan is the maruti. zimdra as its dealer (fronting) has contributed to the rupee shortage. they have bought this current situation upon themselves.
    in times of our economy being down, we should keep our self interest aside and think about the country. the health of our economy has to get better and recovery always takes time but it will happen. 

  5. Totally agreed. RMA and Banks must not give in to demand of few no-so-important vehicle dealers demand. They are being selfish and forget the larger picture of dire economic conditions we are going through. People like Zimdra owner should be supporting RMA and Banks restriction rather than always crying foul and nit picking.

  6. i think government is taking right initiatives to just create a hollow in these growing cars and machineries import as it not only exhausts Foreign currency reserve in one go but makes a chain of it on import of oil as it grows proportionately.

  7. I think barter system have to introduce … or like Indian business people doesn’t accept BC, we also shouldn’t accept IC, so anyone having IC will go to Bank and change it … I see many IC in bhutanese market circulating one to another shop …

  8. This type of business does not contribute anything to our country. They just import vehicles and drain out rupees and hard currencies. Such business have contributed in depleting the banks of cash reserves.

    Even the employment created by such business is not productive. They have thretened the govt in retrench their employees. I will say that the people should go back to village and start becoming educated farmers. Such measures can make our country self sufficient. What do we get by employing our youths as messengers, security guards etc. Its high time that we employ our youths in agriculture sector including self employment. Govt should direct their attention to agriculture sector as this only can save our country. MoLHR need to stop generating all sorts of jobs to just park our youths in unproductive sectors.

  9. One one who gave comments have to think about the business people living in our country, what if, many employer (a Bhutanese citizen) loose their job/service. Our country’s unemployment rate may increase and Government have to come up with some solution !!!!!

  10. The so called unemployment is a recent phenomena in Bhutan. Bhutanese have been surviving as simple farmers for many centuries and it is irksome for those business people who do not produce anything by themseleves but dependent on others. My parents were farmers capable of producing whatever they need and now my employer habitually dependent on us r in problem. Please do not worry about my employment, I rather become self employed farmer which will take me for few months to pick up.

  11. I have gone through all the comments given above by our fellow citizens who all are concerned about our nation. I would like to give my comments:- If there is no imports of vehicles No. 1 there is no jobs for those who are working in this sectors. I guess there are more than 500-1000 people working directly or indirectly in this sector of business. Which means each staffs may be supporting minimum 5 members of his or her family which again means 2,500 to 5000 people are directly affected. No.2 if the import is allowed the importers pays taxes or duties to the government from which the government can collect the revenue, staffs does not lose their jobs, people running the local workshops will also have some business who also have some people working for them. There are many ways people are suffering if the there is no imports of vehicles. With regard to the import of construction equipments, this is the time where we seen every one is thinking of constructing their own houses, so much of development and changes in the country we are seeing, most of them have taken loan to complete their task. They are unable to purchase the equipments as the import is band. They have to pay interest to bank as they have taken loan. They are stuck and cannot start to do other things because their construction is incomplete, which means they are losing more time in completing the construction, if they finish the construction they can earn money early and can repay banks. Every importer is paying for what they are importing from where I see government is collecting revenues and government do not have to worry about the people who will not lose their jobs. Business people are also doing business on loan; we should not think purely what they are earning from their business is for themselves only. But they are the creator of jobs for our people, therefore I think directly or indirectly these business people are looking after many families…….

  12. Let all of them go back to their villages and work on the fertile lands that their grand parents handed over to them for cultivation. So that our country may reach to self suffficient. One man working in a firm and feeding all other family members staying idle in front of TVs or gossiping does not make one sufficient.

  13. Above comment was given by DPD party people.Think next election 2013 DPD Think think

  14. Why do we need more vehicle’s, this is the question we must ask ourselves? First of all we do not have adequate roads, secondly, as it is, our capital city resembles one giant car park and third and most importantly we don not have enough money ie Rs/USD. I feel for the employees who will most probably be made redundant, at the same time, however, we must look at the larger picture and do the more sensible thing.

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