VietNamNet Bridge - As CBU (complete built unit) car imports have become cheaper than ever and regulations have been loosened on import control, Vietnam could turn into a dumping ground for low-tech, low-quality cars.

In mid-2016, the average import price of Indian cars was VND160 million. The price has dropped to VND100 million, or $4,400, equal to the price of a scooter.

However, this is not good news in the eyes of environmentalists. They have warned that the massive import of cheap products will turn Vietnam into the region’s dumping ground for low-quality cars.

India is aiming to apply Euro 4 emission standards in its own market. Vietnam’s neighboring countries are also applying high emission standards. South Korea, for example, is requiring Euro 5, while China is applying Euro 5 in some cities and Euro 4 in others. Singapore, Malaysia, Thailand and the Philippines all are applying Euro 4.

Meanwhile, though Vietnam stated the Euro 4 will be applied as of early next year, it is still unclear if the plan can be implemented because available fuel cannot satisfy the standard.

An automobile expert said that low-cost cars usually mean low-quality products. 

“Some low-cost car models are made in large lots. Since they cannot sell and have become unfashionable, they sell at low prices,” he said.

The expert said the Indian Grandi 10 consumes a lot of fuel and the front bumper is weak. As for Nano, the car only has a rearview mirror like a motorbike and there is a fan, but no air conditioner. 

Amid the wave of low-cost car imports, MOT (Ministry of Transport) and MOIT (Ministry of Industry and Trade) have submitted to the government a draft decree on the conditions for car production, assembly, import and maintenance service.

As CBU (complete built unit) car imports have become cheaper than ever and regulations have been loosened on import control, Vietnam could turn into a dumping ground for low-tech, low-quality cars.

The draft decree stipulates that all businesses have the right to import cars if they can satisfy requirements, which are described as ‘very easy’.

Deputy general director of Truong Hai Auto Bui Kim Kha said that importers just need to make commitments with the Ministry of Industry and Trade to fulfill their responsibilities for warranty, maintenance and recall of import cars.

“Since 2012, all the car recall campaigns have been implemented by domestic or international manufacturers through their authorized units. How can small car import companies do this. They don’t import cars directly from manufacturers and have poorly equipped maintenance units,” he said. 

VAMA (the Vietnam Automobile  Manufacturers’ Association) also thinks that the loosening of regulations is not in line with international practice.

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