Heated arguments related to Decree 116 and Circular 03 on auto restrictions

Feb 27, 2018 | 07:55 AM GMT+7

TheLEADERThe Decree No. 116/2017/NĐ-CP and the Circular No.03/2018/TT-BGTVT have recently created a controversy among domestic assemblers, producers and importers.

Heated arguments related to Decree 116 and Circular 03 on auto restrictions
Photo: enternews

The Decree No.116 on requirements for manufacturing, assembly and import of motor vehicles and trade in motor vehicle warranty and maintenance services and the Circular No.03 on technical and environmental safety inspection of imported motor vehicles regulated by Decree No.16 has been approved. However, these two documents are causing a major controversy in the automotive industry.

A representative of Vietnam Automobile Manufacturers' Association (VAMA) said that Decree No.116 and Circular No.03 resulted in that there had not had any cars imported into Vietnam since January 1st, 2018.

The representative from VAMA stressed that Decree No.116 caused the import of cars into Vietnam to be interrupted. It made cost higher and prolonged time, which increased price of imported cars.

According to this person, the Decree No.116 creates unfairness between domestic automobile manufacturers and dealers and foreign investors. Many investors that have been operating for more than 20 years in Vietnam even have to stop their operation because of the regulation on the road test.

VAMA said that each new policy should achieve some goals. The first one is expanding market to build a strong automotive industry. The second thing is that tax policy needs to reduce the gap amongst automobile manufacturers and promote competition in the context of small market. The last thing is the development of supporting industries.

Notably, under the provisions of Decree No.116, when conducting inspection and test of vehicles, car import businesses must provide quality management agencies with copies of quality certificates of imported automobiles granted by foreign competent agencies or organizations.

Pham Van Dung, Ford Vietnam General Director, said that this requirement is not in accordance with international practices because exporting countries only provide such certificates for domestic consumption.

According to Dung, this will cause duplication when enterprises have to get certificate not only in exporting countries but also in Vietnam by domestic standard after cars were imported.

However, there are some opposite opinions about these two documents.

Tran Ba Duong, Chairman of Board of Directors and General Director of Truong Hai Automobile Joint Stock Company (Thaco), said that domestic manufacturers have had to meet this requirement on certificate since 2016 and insisted that getting this type of certificate is not strict.

According to Duong, Europe imposes this requirement and this paper is seen as a car's identity which authenticates the car's features through government agencies instead of the marketing method of the brand.

Le Ngoc Duc, General Director of Hyundai Motor Vietnam, shared the same view that certificate is required because in Vietnam, the car is not only vehicle but also an asset.

Whereas, domestic assemblers did not agree with the fact that Decree No.116 caused unfair competition among enterprises because it does not provide any incentives for them.