Car imports to Vietnam have dropped sharply

Nikkei reported that Toyota and Honda suspended exports to Vietnam at the beginning of the year after a new regulation took effect, which requires stringent checks on imported vehicles.

Pham Anh Tuan from VAMA (Vietnam Automobile Manufacturers’ Association) confirmed with the local press that after Toyota and Honda, other auto manufacturers have also stopped imports.

Automobile manufacturers warned last year that the regulations would make it difficult for small automobile importers, official distributors in Vietnam and local assemblers.

Tuan said VAMA for the fourth time filed a petition in mid-December 2017, asking the government to delay the regulations for at least six months. However, the association has not received a reply. 

A report from GDC (General Department of Customs) showed that Indonesia, Vietnam’s second biggest car supply source, only exported 135 products in December 2017. Vietnam imported 13,648 cars in December, worth $360 million.

The report pointed out that in the second half of December, the CBU (complete built unit) imports to Vietnam increased unexpectedly to 6,599, including 2,866 cars with less than 9 seats. 

In Hiep Phuoc Port in HCMC, 1,600 cars with less than 9 seats and pickups arrived in December. 

An analyst said importers rush to import cars in large quantities before Decree 116 took effects to avoid the strict regulations.

Meanwhile, the HCMC and Hai Phong City Customs Agencies have confirmed that no imported cars have arrived since the beginning of the year, though the import tariff has been cut to zero percent under ATIGA (ASEAN Trade in Goods Agreement)

According to Tuan from VAMA, most of the import models of Japanese companies made in Thailand and Indonesia can satisfy the requirement for 40 percent content made locally. Therefore, they can enjoy the zero percent tariff.

These include Ford Ranger, Ford Focus, Toyota Fortuner, Toyota Camry, Corrolla Altis, Toyota Yaris, Honda CR-V, Honda City, Honda Civic, Nissan Sunny, Nissan Navara, Mitsubishi Triton and Mistubishi Pajero.

The models of European auto manufacturers cannot meet the requirement on 40 percent localization ratio, though they have factories in Thailand and Indonesia as well.

Some auto manufacturers and dealers have raised selling prices. The highest retail price applied to Honda CR-V 2018 imported in late 2017 is VND1.256 billion, or VND150 million higher than expected. 

Meanwhile, the price of Mazda CX-5 has increased by VND10-30 million. 

The price increases have not been declared for other models, but suppliers have eliminated some preferences. 

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Tran Thuy