Auto firms made eloquent appeal for relief action

By Tu Uyen - Jul 05, 2018 | 09:12 PM GMT+7

TheLEADERThe Vietnamese automobile market is said not to be really stable because of negative impacts incurred by requirements of Decree No.116/2017/ND-CP, threatening security of thousands of jobs.

Auto firms made eloquent appeal for relief action
Lot by lot test requirement is said to create fair competitive environment between automotive manufacturers and importers by Deputy Minister of Transport

At midterm Vietnam Business Forum 2018 (VBF) held yesterday in Hanoi, Toru Kinoshita, Head of Automotive Working Group and Toyota Motor Vietnam’s president insisted that market size and its stable growth are key factors to attract investment to develop local assembly as well as supporting industries.

However, Toru Kinoshita, also chairman of Vietnam Automobile Manufacturers' Association (VAMA), said that recently it is not really stable because some issues related to Decree No.116/2017/ND-CP (Decree 116) requirements which make negative impact to the market. 

Some items within Decree 116 nearly stopped CBU (completely built-up) import from developed countries such as Japan and EU in the past six months.

Business operation of some CKD (completely knocked down) and CBU business companies has been severely affected as some orders of importing automobile for the first months of 2018 have been cancelled. 

These cancelations are threatening the security of thousands of jobs across Vietnam, both those directly employed by distributors as well as in dealerships across Vietnam.

According to VAMA data, imported and locally assembled commercial vehicles decreased by 31 per cent since Decree 116 came into effect.

Sharing the same difficulties, Michael Kelly, Chairman of American Chamber of Commerce in Vietnam (AmCham), commented that Decree 116 on automobile imports created unexpected technical barriers to the US companies in the automotive sector.

Not only AmCham, European Chamber of Commerce in Vietnam (EuroCham) said that the implementation of Decree 116 and Circular 03/2018/TT-BGTVT (Circular 03) did not have enough transitional timing.

The deadline for effective implementation was given at too short notice and with an inefficient transitional period so that goods “en route” were affected. Vehicles continued to arrive and have been stuck at the harbors since January 1, 2018. 

According to the information of EuroCham, as of mid-April 2018, only one auto company seems to have had CBU vehicles homologated.

Facing the unfavorable situation with automobile foreign exporters to Vietnam, AmCham’s Chairman urged the Government to delay implementation of the Decree for a period of 18 months. 

VBF’s Automotive Working Group recommended that all CBU vehicles docked in Vietnam from January 1 to June 30, 2018 should be treated as “en route” and exempted from compliance with Decree 116 and Circular 03. It also proposed Vietnam Government consider removing overseas VTA (vehicle type approval) requirement for CBU.

Responding the concerns of many foreign business representatives in the field of imported automobiles, Deputy Minister of Transport Nguyen Van Cong emphasized that lot by lot test requirement helps to strictly control the quality of car and protect the interests of consumers.

He affirmed that: "This requirement for imported automobiles is necessary, ensuring the uniformity of imported cars' quality, creating fair competitive environment between automotive manufacturers and importers as well as protecting the legitimate interests of consumers".