Most of the domestic auto industry went into a tizzy when Decree 116 tightening controls over the import and assembly of cars was issued in October, and days away from its official implementation, the worries and divisions remain.

Hyundai trucks at the Truong Hai Auto Corporation’s manufacturing plant in Quang Nam Province.

Though the Decree116 took immediate effect when it was issued on October 17, it was announced that implementation will begin on January 1, 2018, to give all firms time to meet the new requirements.

At a Friday meeting held by the Ministry of Transport (MoT), the Truong Hai Auto Corporation (Thaco), a leader in the domestic market, reiterated its complete support for the decree, saying its provisions were appropriate and feasible.

Thaco representative Nguyen Hung Minh, said that since the company was fully domestic, importing wholly assembled vehicles straight from Japan, it would have no problem complying with the new requirements.

Also speaking in concord with Thaco was Hyundai Thanh Cong (HTC), official distributor of Hyundai vehicles in Viet Nam.

HTC representatives said at the meeting that the decree’s provisions on quality certification, which has generated a lot of complaints from importers and assemblers, should be seen as the basis for restricting imports of poor quality cars into Viet Nam, protect consumers and make the market more equitable.

They also said, in contradiction to complaints of it being a redundant, expensive provision, that the inspection of a sample vehicle from each imported batch of cars was needed to ensure genuine warranty and maintenance facilities.

The rationale behind the support of these two firms was the belief that the new decree would enable Vietnamese importers to act on behalf of foreign manufacturers in recalling orders or assuring customers of product quality and after-sales services.

However, the Japan Business Association in Viet Nam said that some automobile assembly and importing joint ventures have been asking that implementation of Decree 116 be postponed for at least six months so that they can arrange the necessary paperwork.

Representatives of Suzuki Vietnam said at the meeting that importers in the south would have to transport their vehicles to Ha Noi for inspection, while Ford Vietnam complained that the random sampling of imported vehicle batches would complicate procedures, increase costs as well as time taken to clear the vehicles.

In response, Dang Viet Ha, Deputy General Director of the Vietnam Register, said that the random sampling and inspection process will be objective and transparent, and carried out in a swift and accurate manner.

According to Decree 116, in order to obtain an operating and selling license, enterprises are required to legally own, contractually lease or authorise vehicle servicing premises that conform to prescribed requirements.

Importers must also have documents showing that they are authorized to act on behalf of foreign automotive manufacturing and assembling enterprises recalling imported vehicles.

Compliance rush

After the decree was issued, the Vietnam Automobile Manufacturers Association (VAMA) sent four recommendations to the Prime Minister’s Office and related ministries, said the Ha Noi People’s Committee’s official news site Kinh te & Do thi.

The association argued that several of the decree’s requirements would waste the firms’ time and resources.

Speaking at the Friday meeting, Tran Thanh Hai, Deputy Director General of the Trade Ministry’s Import-Export Department, said that despite their incessant complaints, importers have been scrambling to obtain the needed licences.

He also said that Decree 116 was a supportive measure for domestic companies to set up a number of technical barriers to limit the number of imported cars.

Though import tariffs for vehicles from ASEAN countries will be set to zero, the decree would ensure there was no “wave of cheap cars,” that would hit the domestic market, he said.

Imported car prices could go up in the first few months of 2018 due to a supply shortage as some importing firms struggle to meeting the new requirements, Hai said.

Responding to the firms, representatives from the Ministry of Industry and Trade (MoIT) and the MoT said that application of the regulations was still in progress.

Tran Quang Ha, Deputy Director of the MoT’s Department of Science and Technology, said that the firms’ opinions on Decree 116 will be taken into consideration for future adjustments, like allowing batch test results to be valid for a period of six months.

According the General Department of Vietnam Customs, as of December 15, 2017, 90,611 vehicles worth US$2.1 billion were imported into the country. —VNS