VietNamNet Bridge - The Ministry of Industry and Trade’s idea to loosen the requirements enterprises must have to be able to import cars has been facing the strong opposition from the enterprises--which have spent much investment money to satisfy the requirements.

One year ago, the Ministry of Industry and Trade (MOIT) released the Circular 20 with strict regulations, aiming to tighten the management over car imports.

The circular stipulates that car importers must show the procuration granted by the automobile manufacturers themselves.

The legal document then dealt a strong blow on car dealers, who said that it was nearly impossible to obtain such requirements from the automobile manufacturers, and that car import companies would go bankrupt in masses because of the strict regulation.

However, MOIT still turned a deaf ear on the complaints, insisting on the necessity to promulgate the legal document.

One year later, MOIT has changed its mind after realizing that the strict regulations really have weeded out a lot of car dealers from the market, thus making the market less competitive. It has also been informed that the tax sums collected from automobile imports have decreased dramatically, thus badly affecting the state budget income.

Therefore, MOIT is now considering loosening the strict requirements, and once again, facing the strong opposition from the business sector.

In the past, when it insisted on setting up the strict regulations, it faced the protest from small car dealers, who cannot satisfy the requirements. And now, when attempting to loosen the requirements, it is facing the opposition from the enterprises which have made heavy investment to expand the distribution networks.

Dang Phan Thu Huong, Deputy General Director of Toyota Vietnam, said on Dau tu that in any cases, MOIT and relevant ministries need to follow consistently the purpose set up when issuing the Circular No. 20.

The decision by MOIT has been advocated by Toyota Vietnam and other members of the Vietnam Automobile Manufacturers’ Association (VAMA), which believe that it’s necessary to stimulate healthy trade to protect the rights and legitimate benefits of consumers.

Meanwhile, Tran Ba Duong, President and CEO of Thaco Group, has warned that if the watchdog agency removes the requirement on procurations to be granted by automobile manufacturers themselves, this would pave the way for car dealers to import distort the market and create unhealthy competition.

Regarding the sharp falls of the tax collection, Duong said this should be blamed on the current economic difficulties rather than the car imports decreases.

Duong also thinks that Hanoi and HCM City are imposing overly high automobile ownership registration tax rate of 20 percent, saying that this has discouraged people to buy cars.

Dau tu has also quoted Sales Director of Honda Vietnam as saying that if the requirement on the procuration from manufacturers themselves is removed, this would badly affect official car distributors and the business of sales agents.

The director said that the legal document adjustment would be applauded by automobile manufacturers if the new regulations benefit customers. However, in this case, customers would not be the beneficiaries from the amendment.

Horst J. Herdtle, CEO of Euro Auto, the authorized BMW importer and distributor in the Vietnamese market, said that authorized distributors have to spend big money to set up standardized distribution network, which would be a great waste if the regulations are removed.

Dat Viet newspaper has quoted Michael Behrens, CEO of Mercedes Benz as saying that what automobile manufacturers need a stable legal framework which allows them to predict the investment costs and the market performance.

Compiled by C. V