VietNamNet Bridge - If new suggestions by state management agencies receive approval, the automobile market is expected to benefit bigger dealers. 

Not only cars with fewer than nine seats, but passenger cars with 10 or more seats, specialized vehicles, trucks, new/used imports and domestically assembled cars would have to show certificates from manufacturers’ authorized maintenance services. 

The proposed regulations are expected to keep small traders away from the market.

Removing sub-licenses, installing technical barriers

In a report to the Prime Minister about Circular 20 on August 18, the Ministry of Industry and Trade (MOIT) admitted that the legal document was not the best solution to protect consumer rights and ensure transport safety.

If new suggestions by state management agencies receive approval, the automobile market is expected to benefit bigger dealers.

It said the circular only covered vehicles with 9 and fewer seats; it applied only to imports, not to domestically made products, even though the risks are the same for all kinds of vehicles and from all sources.

The ministry believes that in order to protect consumer rights and transport safety, Circular 20 should be applied to all kinds of vehicles in circulation, no matter whether they are passenger or cargo vehicles or where they are produced.

The only agency which has the right to issue regulations is the Ministry of Transport; the regulation must be applied to both imports and domestically made products.

Circular 20 does not cover used cars and cars with nine and fewer seats imported to Vietnam as gifts and assets. 

Therefore, many car dealers dodged the law by importing cars as gifts and did not have to observe the regulation.

The problems can only be settled with the new regulation that all vehicles must not be registered and put into circulation in Vietnam if manufacturers, or those authorized by manufacturers, come forward and take responsibility for maintaining services.

With the arguments, MOIT has proposed to the Prime Minister not to agree to the proposal to exclude ‘automobile warranty & maintenance services’ from the list of conditional business types.

The playing field 

As such, once the Circular 20 is removed, another similar regulation, to be applied to vehicles in circulation, would be used.

Car dealers told VietNamNet that they were worried about tentative new regulations which will create barriers to small enterprises to join the automobile market. 

“If the proposals get approval, small enterprises will have no more room in the market, because most of the manufacturers making passenger cars with 16 seats or less have authorized maintenance establishments in Vietnam,” he said.

“I am afraid that the automobile market will be controlled by several brands and this will not benefit consumers,” he said.

Tran  Thuy