The Office of the Government said on February 23 that it will hold a meeting with representatives from business associations, enterprises, and foreign embassies regarding the obstacles in the newly-issued Decree No. 116 and the Ministry of Transport’s Circular No. 3 on new car import regulations.

The February 26 meeting, to be chaired by Minister and Chairman of the Office of the Government Mai Tien Dung, will be attended by representatives from foreign embassies such as the US, Japan, South Korea, and the EU.

The Vietnam Automobile Manufacturers’ Association, the Japan Business Association, the South Korea Business Association, the European Chamber of Commerce, and representatives from a number of automobile manufacturers and dealers will also be in attendance.

The meeting comes at a time when Japanese auto manufacturers have decided to suspend exports to Vietnam following the issue of Decree No. 116 on car manufacturing, assembly, importation, and warranties; a move that tightened car imports from January 1.

Toyota has halted all production for export to Vietnam. It manufactures auto components in Vietnam but imports of completely-built-units (CBUs) from Thailand, Indonesia, and Japan account for around one-fifth of what it sells in the country.

Fellow Japanese giant Honda had previously planned to consolidate all production of its SUVs in Thailand to take advantage of a new tariff rule that also took effect this year to cut import tariffs for autos built and sold within ASEAN from 30 per cent to zero.

Honda has since abandoned that plan, and production of vehicles intended for Vietnam has been suspended since early January.

In a similar move, Mitsubishi suspended production in Thailand of its Pajero Sports SUV designed for the Vietnamese market.

The new regulation stipulates that traders are only permitted to import automobiles if they can provide valid vehicle registration certificates issued by authorities from the countries of origin.

Original quality control certificates for each vehicle and letters of authorization regarding recalls of defective vehicles from the manufacturers are also required, along with copies of quality assurance certificates provided by the countries of origin.

The regulation also requires importers have one car from each batch shipped to Vietnam to go through emissions and safety tests. Under the previous regulation, only one certificate was required for each model of car, regardless of how many batches were imported.

Most recently, Indonesia has voiced concerned about Vietnam’s strict new car import regulations. “The new rule creates additional costs; a complete inspection may take one to two months, while other cars from the shipment will have to stay at the port and be charged daily for storage,” foreign newswire The Straits Times quoted Indonesian Automotive Manufacturers Association (Gaikindo) Secretary-General Mr. Kukuh Kumara as saying.

Indonesian President Joko Widodo also expressed concern that the new policy would impact bilateral trade between the two countries, which has increased over the past three years.

Gaikindo’s Co-Chairman Mr. Jongkie Sugiarto said Indonesian manufacturers had no problems fulfilling Vietnam’s quality demands, such as the Euro IV spec engine, airbags, and antilock braking systems, but the sample inspection would be a hassle.

“The inspection is difficult because it must be performed on each model, in every shipment,” he said. “If (the test) fails, (Vietnam) would return the shipment.”

According to data from the Central Statistics Agency (BPS), Indonesian passenger car exports to Vietnam from January to November last year were valued at $241.2 million, up from just $17.78 million in 2016. Indonesia is also the third-largest passenger car exporter to Vietnam, after Thailand and China, with a market share of 13.12 per cent.

The Indonesian trade ministry’s International Trade Director General, Mr. Oke Nurwan, said if manufacturers are reluctant to export their cars to Vietnam, Indonesia could lose around $85 million in the December-March period.

The Vietnamese Government has stated that the new decree was an effort to safeguard its companies as the country works to change the landscape of its automotive industry by building its first national car.

Vietnam imported only 17 motor cars of less than nine seats in January, compared to 3,700 in just one fortnight in January 2017. In total, the country imported 337 CBUs last month, according to the General Department of Vietnam Customs.

Vingroup, Vietnam’s largest real estate company and owned by the country’s richest man, Mr. Pham Nhat Vuong, has invested in a local car model called Vinfast. The company recently appointed Italian-based car design studio Pininfarina to design the model, which is known for designing cars for high-end brands like Ferrari, Bentley, and Maserati.

VN Economic Times