Kathmandu: How much profit do you think a car dealer makes on selling one vehicle? You might guess Rs 100,000, maybe Rs 200,000, or at most Rs 500,000. That would sound reasonable to most buyers.
But that assumption turns out to be far too low. In reality, car dealers in Nepal are often earning many times more than consumers imagine when handing over the keys to a new vehicle.
At first glance, a margin of Rs 500,000 on a car priced at Rs 5 million, or Rs 600,000 on a Rs 6 million car, may not seem excessive. Considering showroom expenses, financing costs, logistics, and staffing, a profit margin of up to 10 percent would generally be considered acceptable in the automobile business.
What shocks many consumers, however, is evidence showing that some dealers are making profits of up to 40 percent on a single car. In Nepal’s electric vehicle market, SPG Automobiles, a company under the Sharda Group that sells the Chinese EV brands Omoda and Jaecoo, appears to be earning margins as high as Rs 1.8 million on a car priced at around Rs 6 million.
In recent years, Chinese electric vehicles have surged in popularity in Nepal. Compared to Indian brands, Chinese EVs enjoy stronger sales and wider acceptance in the Nepali market. Taking advantage of this growing demand, SPG Automobiles has reportedly been selling individual vehicles with profit margins reaching up to 40 percent.
Documents obtained by Clickmandu indicate that SPG Automobiles applies margins of up to 40 percent on the actual landed cost of Omoda and Jaecoo vehicles imported into Nepal. A comparison between customs-cleared import costs and final consumer prices shows a substantial gap that translates directly into dealer profit.
According to import invoices and retail pricing, the difference between cost and selling price stands at 40.12 percent for the Omoda E5 Luxury, 29.82 percent for the Jaecoo J5, 28.92 percent for the Jaecoo J6, and 25.23 percent for the standard Omoda E5.
Take the Omoda E5 Luxury, which carries the highest margin. The average landed cost of this vehicle, including all applicable taxes, is Rs 4.42 million. Yet the company has set its official retail price at Rs 6.199 million. This means SPG Automobiles earns around Rs 1.775 million in profit on a single vehicle. The company claims it offers a discounted price of Rs 5.499 million, but even at that level the margin remains substantial.
For the standard Omoda E5, the profit margin is also striking. With a tax-inclusive cost of Rs 4.391 million, the car is sold at Rs 5.499 million, generating a profit of roughly Rs 1.108 million per unit, or 25.23 percent.
Invoices show that Chinese automaker Chery sells the Omoda E5 Luxury to SPG Automobiles at an average price of 135,000 Chinese yuan, equivalent to about Rs 2.701 million. In Nepal, a vehicle with a 99-kilowatt motor is subject to a layered tax structure: 20 percent customs duty, 15 percent excise duty, 13 percent value-added tax, and a 5 percent road construction levy, bringing the total tax burden to 63.74 percent. After taxes, the total cost reaches Rs 4.424 million, before dealer margins are added.
A similar structure applies to the standard E5, which SPG purchases for around 134,000 yuan, or Rs 2.681 million. After taxes, the cost rises to Rs 4.391 million. With a selling price of Rs 5.499 million, the dealer pockets over Rs 1.1 million per vehicle.
The Jaecoo models show comparable profit levels. The Jaecoo J6 has a landed cost of Rs 5.429 million, but is sold to consumers for Rs 6.999 million. This generates a profit of Rs 1.57 million, or 28.92 percent. The Jaecoo J5 carries an even higher margin of 29.82 percent, with a cost of Rs 4.775 million and a selling price of Rs 6.199 million, resulting in a profit of Rs 1.424 million per car.
Jaecoo vehicles are equipped with more powerful 135-kilowatt motors, which places them in a higher tax bracket. These cars face 30 percent customs duty, 20 percent excise duty, 13 percent VAT, and a 5 percent road construction levy, pushing the total tax burden to 85.09 percent of the invoice value.
Automobile companies often argue that the gap between cost and retail price is not pure profit. They describe it as a margin that covers transportation, bank interest, showroom rent, staff salaries, and other administrative expenses. While this is partly true, consumer advocates point out that the difference between purchase cost and selling price ultimately represents profit derived from consumers, regardless of how companies allocate it internally.
From a consumer rights perspective, maintaining margins of up to 40 percent under the guise of operational costs is widely seen as excessive profiteering. Critics argue that government tax incentives on electric vehicles were introduced to make clean transport affordable, not to inflate dealer profits.
Despite customs concessions for EVs, the primary beneficiaries appear to be importers and dealers rather than ordinary buyers. This concern is reinforced by import data. According to the Department of Customs, SPG Automobiles imported 159 Jaecoo vehicles and 101 Omoda vehicles in a single month.
Overall, Nepal imported electric vehicles worth Rs 9 billion over the past five months. During the first five months of the current fiscal year, nearly 3,800 EVs entered the market. By mid-December, total EV imports stood at 3,798 units across different capacity segments.
These imports, valued at Rs 8.955 billion, generated Rs 5.563 billion in government revenue. EVs imported into Nepal are categorized into four groups based on motor capacity. Vehicles with motors between 51 and 100 kilowatts dominate the market, accounting for 2,164 units over five months, with a total import value of Rs 5.608 billion.
EVs with motors up to 50 kilowatts rank second, with 1,215 units imported at a value of Rs 2.073 billion. Imports of EVs with capacities between 101 and 200 kilowatts totalled 414 units, valued at Rs 1.238 billion. Vehicles in the 201 to 300 kilowatt category remain rare, with just five units imported during the period, worth Rs 35.1 million.
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