Car buyers have withdrawn their deposits due to prices being higher than expected and tougher rules making imports more difficult.

A model stands next to a car at an automobile exhibition. Car buyers have withdrawn their deposits due to prices higher than expected 

According to Honda Vietnam agents, after the firm announced CR-V auto prices this year of between VND1.1 billion and VND1.3 billion, some customers who had registered to buy the car have got back their deposits to buy other cars with lower prices such as Nissan X-Trail SV and Hyundai Santa Fe.

The prices are higher than the levels Honda announced in mid-November, at below VND1.1 billion.

Honda Vietnam explained that CR-V autos imported from Thailand were subject to an import duty of 30% as they were imported last year while the firm estimated the price based on an import tariff of 0% for this year.

Other auto enterprises have not imported CBU autos since early this year as the Government’s Decree 116 requires auto importers to submit Vehicle Type Approval (VTA) certificates issued by competent authorities in exporting countries. Meanwhile, many countries such as Japan and the U.S. do not issue such certificates.

According to Honda Vietnam, more than 2,000 customers had registered to buy CR-V SUVs but only 750 units have been imported and when to receive the second batch is unknown.

Sales often jump two months prior to Tet holiday but firms now have not imported cars.

Japanese automaker Toyota, which holds the biggest market share in Vietnam, has stopped importing Hilux, Yaris, Fortuner, Land Cruiser and Lexus autos due to Decree 116. The firm is now assembling Vios, Camry, Innova and Altis cars.

A representative of Ford Vietnam said the firm had written to its agents announcing not to receive new orders for Ford Ranger and Explorer cars two months prior to the issuance of Decree 116 as it was unable to import these autos.

Moreover, it takes three to four months to receive auto shipments from ASEAN countries and four to five months from other countries. Therefore, imported autos will be available on the local market from the middle of the year if they are allowed to enter Vietnam in March.

Pham Anh Tuan, head of the strategic planning department at Toyota Vietnam, said the firm has stopped selling imported autos including the luxury model Lexus.

Japan’s Nikkei newspaper last week reported that both Toyota Motor and Honda Motor had suspended exports to Vietnam since early this year due to Decree 116.

Despite owning an auto assembly plant in Vietnam, Toyota imported 1,000 cars per month from Thailand, Indonesia and Japan to meet 20% of the demand in Vietnam, mainly Hilux, Yaris, Fortuner and Lexus.

Vietnam’s auto market in 2017 was growing slower than in 2016 as consumers were waiting for tariff reductions, Nikkei cited Toyota Motor Thailand president Michinobu Sugata as saying.

Between January and November 2017, car sales in Vietnam fell 10% year-on-year to 245,000 units. Toyota Thailand expected the market to grow this year but it could not export cars to Vietnam anymore due to non-tariff barriers by the Vietnamese Government, said Sugata.

Toyota, Honda, Ford, Mitsubishi and Suzuki said they could not import autos into Vietnam while importers of autos from Europe such as Mercedes, BMW and Volkswagen said they could submit VTA certificates as the Vietnamese Government’s requirement but no auto batches have been sent to Vietnam this year.

However, this is a good chance for domestic auto enterprises as many customers have had no choice but to buy locally assembled cars.

SGT