All prices of the four car models including Honda CRV, Civic, Jazz, and Accord which are in the first duty-free imported shipment to Vietnam have been reduced by up to nearly VND240 million (roughly US$10,579).
Besides Honda, other automobile companies in Vietnam are urgently completing procedures for importing vehicles from Thailand.
The Decree 116 of the Government on requirements for manufacturing, assembly, and import of motor vehicles and trade in motor vehicle warranty and maintenance services and Circular 03 of the Ministry of Transport (MoT) guiding the implementation of Decree 116 have been seen as the obstacles that are enabled to overcome to import cars to Vietnam.
This is partly due to stricter conditions related to the homologation tests (emission and safety) and especially the required Vehicle Type Approval (VTA) certification which is issued to exported cars by no countries in ASEAN.
However, certifications recently issued by Thai government have been accepted by MoT, enabling enterprises to import cars to Vietnam. However, these cars must pass the homologation test before being handed over to the owners.
The process lasts few months, which means that the earliest time for Honda’s 2,000 recently imported cars to be handed to customers is in mid-April or early May 2018, according to Head of the Vietnam Automobile Manufacturers' Association (VAMA)'s Policy Subcommittee Pham Anh Tuan.
Automobile enterprises are also waiting for other ASEAN countries like Indonesia and Malaysia issuing the required VTA. Tuan said that countries need to make adjustments in their law to be able to issue VTA for exported vehicles.
Enterprises and experts expect that when the import tariffs on cars reduce to zero per cent, imported cars would be cheaper than the same type of car produced and assembled in the country.
Pham Anh Tuan said that to meet the requirements of Decree 116, businesses will have to spend some other expenses to be able to put vehicles on the market such as inspection costs, costs of building test road, etc.
However, he said that these costs are not worth much compared to the 30 per cent of automobile imported tariff that has been exempted. Therefore, the prices of imported cars will decrease significantly in the coming time.
In addition to enjoying a tax rate of zero per cent, vehicles with a cylinder capacity of less than 2.0L are also entitled to a five per cent reduction in excise taxes.
Although the difficulty in importing cars from ASEAN has been partly solved, businesses have many other obstacles ahead, particularly the regulations on homologation tests.