As part of its efforts to strengthen foreign currency reserves, the Bhutanese government has decided to extend the moratorium on vehicle imports for an additional six months, from February 18th, 2024 to August 17th, 2024. This extension is expected to significantly impact the nation's automotive market, presenting both challenges and opportunities for the industry.

On the one hand, the moratorium will likely lead to a decrease in the availability of new vehicles, which could drive up prices and limit consumer choices. Local dealers and importers might face financial strains due to reduced sales volumes. Additionally, consumers may experience difficulties in accessing new and technologically advanced vehicles, which could affect overall market satisfaction.

On the other hand, this situation opens up prospects for local automotive businesses to innovate and adapt. There could be an increased focus on maintaining and refurbishing existing vehicles, creating a boost in the aftermarket service industry. Furthermore, the moratorium could encourage investment in domestic vehicle manufacturing and the promotion of locally assembled or produced vehicles, potentially fostering growth within the country's automotive sector.

Source Bhutan Automotive

Impact on the Auto Market:

The prolonged moratorium is anticipated to restrict the availability of new vehicles, resulting in a projected increase in demand for used cars. This alteration in market dynamics may influence the pricing and accessibility of pre-owned vehicles. Although the moratorium is essential for safeguarding Bhutan's foreign currency reserves and enhancing economic stability, it presents challenges for the automobile sector.

Challenges Faced by the Auto Industry:

The automobile dealers in Bhutan have expressed concerns about the impact of the moratorium on their businesses. One dealer reported a 70-80% decrease in business, making it difficult to survive, retain employees, and pay utility bills. The industry is eagerly anticipating government initiatives, such as new loan schemes or reduced EMI interest rates, to help mitigate the effects of the moratorium.

Electric Vehicles and Charging Infrastructure:

With the global shift toward electric mobility, Bhutan's auto dealers are calling on the government to expand the installation of fast-charging stations, extending beyond urban centers to rural areas. Additionally, they stress the necessity of offering guidance and solutions for the appropriate disposal of batteries to mitigate environmental repercussions.

Opportunities for Local Manufacturing:

Many auto dealers in Bhutan express a keen interest in establishing a domestic automobile industry with government backing. They assert that such a move would not only address concerns about foreign currency reserves but also lessen reliance on importing numerous vehicles from abroad. Through the encouragement of local manufacturers and the promotion of domestic production, the government has the chance to bolster the economy and create job opportunities.


The prolonged halt on vehicle imports in Bhutan has placed considerable strain on the automotive industry, posing challenges for dealers in sustaining their businesses. Nonetheless, this circumstance also offers a unique opportunity for collaboration between the government and industry stakeholders to develop impactful strategies in aid of the local automobile sector. Through the creation of an enabling environment for the industry, promotion of domestic manufacturing, and substantial investments in electric vehicle infrastructure, Bhutan has the potential to establish a robust and self-reliant automotive industry, thereby playing a pivotal role in the nation's economic advancement.