The Investment Board Nepal (IBN), a government body responsible for dealing with large-scale investment, has approved an investment proposal to establish a car manufacturing and assembly plant in Nepal. The proposal of Foreign Direct Investment (FDI) worth Rs 10.54 billion was submitted by Motrex Co Ltd, a South Korean Firm.
IBN’s statement said that a board meeting of the IBN, chaired by Prime Minister Sharma Oli, approved the proposed investment. Motrex Co Ltd. had submitted its proposal three months ago and it was finally approved on Friday.
The company mainly produces audio-visual navigation (AVN), audio video (AV), around view monitor, head up display and rear seat entertainment (RSE) for 4 wheelers. It also provides remote vehicle controls, fleet management systems, driver state monitoring product, automotive intelligent docking adaptors, and DashCams.
Not everything has been finalized. Now, the company has to sign a PIA (Project Investment Agreement) with IBN to start operating in Nepal. The PIA is a document that defines terms of investment between the Nepali government and the investor.
IBN officials said that the South Korean company has proposed producing four wheelers, particularly passenger cars and electric vehicles. This is a huge deal for Nepal as (all of you know this) it does not have any vehicle assembly plant and the country imports all the vehicles with both four-wheelers and two-wheelers.
Motrex has proposed that the company will start producing vehicles from 2021, first by producing around 2,000 vehicles in a year. According to an IBN official, the company will produce 20,000 vehicles by 2027.