Freeze on import of luxury cars continues

The import of expensive/luxury cars and two-wheelers into Bhutan has dropped significantly with the government fixing a price ceiling starting July 2020 to arrest the outflow of hard currencies. The moratorium which targeted four-wheelers that cost more than USD 40,000 and two wheelers costing USD 10,000 or its equivalent came in the wake of Covid-19 pandemic which unleashed unprecedented economic difficulties on Bhutan. Prior to the freeze, the government was losing a substantial amount of foreign currency, particularly the United States Dollar, as the price of vehicles paid in Ngultrum by the buyers had to be converted into a foreign currency by the government. “The payments have to be in dollars,” said Chencho, the Chief Finance Officer of one of Bhutan’s biggest vehicle-importing house, the State Trading Corporation of Bhutan Limited (STCBL). “The dollar reserve is being used to import essential items by the government.” The ban however is temporary. “If the economy gets on a good footing and when the COVID-19 pandemic subsides, the government may lift the ban on importing luxury vehicles,” Chencho said. Some of the vehicles which cost above Nu 10 million are Toyota Land cruiser, Range Rover, and Porsche Cayenne E-Hybrid. As per the vehicle statistics of the Road Safety and Transport Authority (RSTA), there were 115,897 vehicles in Bhutan as of August 31, 2020. The highest was in Thimphu with 62,198 vehicles, Phuentsholing with 37,882, Gelephu with 7,734, Samdrup Jongkhar with 5,519 and Monggar with 2,564. The vehicle population is dominated by light vehicles at 68 per cent with two-wheelers as the most prevalent item in this category at 8.9 per cent. Buses (institutional, tourist and public transport) made up for only 1 per cent of the vehicular population in 2019-2020. In 2020 alone, Nu 6.6 billion worth of vehicles were imported into the country. As of May, 2021, Bhutan had imported over 2,300 vehicles. In 2016/2017, Bhutan’s import averaged 22 vehicles a day. The majority, 12,535 vehicles, were imported from India followed by Japan with 2,601 vehicles and the rest from other countries at 470 vehicles. Bhutan has seen a substantial increase in vehicle import in the last few decades. The numbers doubled from about 11,900 in 1990 to 20,000 in2001. By 2011, the total reached 61,756 which jumped further to more than 100,000 vehicles in 2018. By 2019, there was one motor vehicle for every seven person in Bhutan.