A factory of Hyundai Thanh Cong (Photo: VNA) Hanoi (VNS/VNA) - Auto businesses areconcerned about Vietnam’s future policy orientation with regard to the autoindustry, which they think will affect their business strategy.
The concerns were raised after thebusinesses received a Government document instructing relevant ministries andagencies to build technical barriers to control the quality of importedvehicles.
Businesses recommended that the Governmentmaintain stable long-term policies for them to assure future investment in Vietnam.
The request was sent to the Governmentafter an inter-sector auto inspection team worked with 17 auto importers andlocally-assembled manufacturers to solve issues while implementing theGovernment’s decree on car manufacturing, assembly, importation and warrantyoffering - a move that came into effect from January 1, 2018, and tightened carimports.
Enterprises must now receive vehicle typeapproval (VTA) certification when importing cars from the authorities of theimporter country. Businesses can be granted VTA certification when importingvehicles from Thailand and Indonesia; however, with vehicles imported fromJapan, they cannot obtain it as the Japanese Government doesn’t grant suchcertification for exported vehicles. The enterprises proposed that theGovernment allow the use of the test report from the vehicle manufacturer.
When importing cars from Europe, the autobusinesses petitioned the Government to accept certificates of technical safetyand environmental protection, provided by the European manufacturers, instead.Europe applies Euro 6 emission standards, whereas Vietnam applies just Euro 4,thus the vehicles are guaranteed to meet Vietnamese standards.
In addition, businesses importing cars saidthat the inspection and testing procedures for each batch of imported vehiclesis time consuming and costly, causing an imbalance between locally producedcars and imported ones.
Therefore, they proposed the Governmentconsider reducing the number of samples tested from each batch of carsproduced.
Regarding locally-assembled production, theauto businesses expected the Government to continue recognising the certificateof components issued in accordance with European Economic Commission withouttesting or certification in Vietnam.
The investment in new trial roads istime-consuming and costly, they said, because now all automakers have investedin the test track.
Based on the recommendations of theenterprises, the inter-sector auto inspection team has directly answered 74 outof 85 queries, the remaining issues will be reported to the Government toconsider and remove on a case-by-case basis.
Car prices fluctuate
After reducing import tax on CBU units tozero percent from the beginning of this year, the Vietnamese automobile marketrecorded two companies have been qualified to import cars for distribution at asignificantly lower cost. However, due to the scarcity of supply, some firmshave increased the price of locally assembled vehicles.
According to calculations of insiders, whenimported vehicles levied with zero percent of tax incentives under the ASEANTrade in Goods Agreement, car prices were supposed to decrease by 20 – 25 percentcompared to that of previous year. However, the Government’s Decree 116 issuedat the same time required importers to meet several strict conditions that makeit difficult to import cars to Vietnam.
The remarkable point of the decree is thatthe importers must have vehicle type approval (VTA) certification fromauthorities in exporting countries.
From the beginning of the year to date,there are only two companies - Honda and GM - that imported cars to Vietnamafter they gained VTA certification from exporting countries. In March, Hondaimported about 2,000 cars in four types including CR-V, Civic, Jazz and Accord.This was also the first batch of cars imported into the country since theimport tax rate of autos from ASEAN decreased to zero percent.
In the above four types, the mostanticipated one is CR-V, which is priced from 963 million VND to 1.073 billionVND, close to 200 million VND cheaper than the 2017 price.
Along with Honda, GM Vietnam recentlyimported the Chevrolet Trailblazer sport utility vehicle from Thailand, pricedfrom 859 million VND to 1.075 billion VND. At the same time, the firm announceddiscounts for this car from 30 million VND - 80 million VND.
Unlike Honda and GM, the preferred importedcars such as the Toyota Fortuner, Ford Explorer, Toyota Land Prado and the FordRanger were not imported, as importers have not yet completed the proceduresaccording to Decree 116.
Cars imported from Europe in general andfrom Germany in particular, which are subject to a 70 percent import tax, arealso heavily affected by the new regulations of Decree 116. As a result therehas not been any model of Audi, BMW or Volkswagen that has been imported toserve domestic consumers so far this year.
According to disclosures from a number ofenterprises, there weren’t many cars imported before 2018, as such businesses aretrying to complete the import procedures to bring the car to consumers in thebeginning of the third quarter this year.
The difficulties of importing vehicles to Vietnamhas led to a scarcity of supply, thus companies assembling cars domestically,which are given a 5 percent reduction to special consumption tax, and enjoy noimport duty tax, are beginning to take advantage of the situation by raisingprices.
In early May, Nissan Vietnam suddenlyincreased the price of its model Sunny XL by 10 million VND, bringing theoverall cost to 438 million VND. They also increased the cost of the model XVby 11 million VND, bringing the cost up to 479 million VND.
Along with Nissan, Mitsubishi MotorsVietnam also raised the selling price for Outlander 2.0 CVT low-end model inMay an additional 15 million VND, to a total of 823 million VND.
Similarly, Truong Hai Automobile JointStock Co (Thaco) rose the price of Kia Cerato 1.6L to 530 million VND, a 5million VND increase, and increased the cost of the Cerato 2.0 to 635 millionVND, a 6 million VND raise. It also raised the price of two versions of theMazda 2 by 30 million VND each to 529 million VND and 569 million VND,respectively.-VNA
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