Logo of Phnom Penh Post newspaper Phnom Penh Post - Vietnam gov’t to loosen conditions for auto imports

Vietnam gov’t to loosen conditions for auto imports

Content image - Phnom Penh Post
An assembly worker on an auto manufacturing line of Thaco Group.​ DUC THANH/BAODAUTU.VN

Vietnam gov’t to loosen conditions for auto imports

The Vietnamese government will soon issue a revision to Decree 116/2017 on the conditions for production, assembly, import and business of automobile warranty and maintenance services, removing a number of regulations relevant to auto imports.

The statement was released by Minister and Chairman of Government Office Mai Tien Dung at a recent conference held in Hanoi.

He said the revision would include changing from the current inspection for each batch of imported vehicles to type of vehicles, which are considered to be difficult and expensive for businesses.

With the current capacity of auto registration centres, Dung said the inspection of imported automobiles should change from the current pre-inspection to post-inspection.

The revision, drafted by the Ministry of Industry and Trade, would now be open to opinions from businesses and the public.

“In the past two years after the decree was issued, the domestic automobile industry has made progress, protecting the interests of consumers while state management has also been stricter in the import of vehicles,” Dung said.

According to Dung, the revision of Decree 116 is appropriate in the context of the automobile market and the import of cars has stabilised. Evidence is that all auto businesses have confirmed the origin and type of imported cars, strictly complying with the provisions of Decree 116. Meanwhile, the number of imported vehicles has increased.

According to a report by the ministry, after the import duty was reduced to zero from last year under the Asean Trade in Goods Agreement (Atiga), domestic manufacturers initially affirmed their role and position in the automobile market. Especially, Decree 116 has played an important role in protecting the production and assembly of cars in the country.

The report shows that after the decree was issued, some Asean countries such as Thailand, Indonesia, Malaysia, the Philippines and other World Trade Organisation members such as the US, Japan and EU raised concerns about Decree 116, saying it may create additional procedures and hinder businesses in exporting cars to Vietnam as well as violating national treatment principles.

“The import of cars has slowed down due to Decree 116 but has increased sharply again,” stated the report.

The ministry said the current output between domestically-produced vehicles and imported vehicles had changed significantly. In 2017, the number of domestically produced vehicles was 2.5 times higher than imported ones. The figure was 3.72 times last year. In the first six months of this year, it decreased to 1.74 times.

However, the ministry said that the domestic sector would not maintain its advantage in the market if it did not attempt to improve quality and lower production costs to increase competitiveness, especially against vehicles imported from Asean, which enjoy preferential import tariffs.

The ministry said it needed to issue solutions supporting and promoting the domestic automobile industry to compete with imported cars, especially those from Asean.

Increasingly narrowing the gap

Nguyen Minh Dong, an expert in the automobile industry, told plo.vn that imported cars were increasingly narrowing the sales gap with domestically-assembled cars because the auto businesses had met requirements of Decree 116, increasing supply.

“In addition, imported models are hitting the low-cost segment that used to be the playground for locally-assembled cars,” Dong said.

To increase the competitiveness for domestic automobiles, Dong said it was necessary to adjust tax and fee policies to help domestic automobile manufacturers and assemblers reduce costs.

“But the most important thing is that domestic automakers must strive to improve quality and lower production costs to enhance competitiveness. The price of domestically-manufactured and -assembled cars is still high, making it difficult to promote the industry,” he added.

To solve the problem, the ministry proposed the government not apply special consumption tax for automobiles which are locally produced, as part of efforts to reduce the price of cars.

The ministry also expected the government to adjust import tax on the principle that the import tax rate on components, spare parts and raw materials must be lower than the import tax rate on completely built-up cars, or at floor level according to international commitments in each period.

In addition, the tax rate will be reduced to zero per cent for items on cars with nine seats or fewer, such as engines and gearboxes, which are valid until 2025.

VIET NAM NEWS/ANN

MOST VIEWED

  • ‘Education’ a priority traffic-law penalty

    A top National Police official on June 21 neither rejected nor confirmed the authenticity of a leaked audio message, which has gone viral on social media, on a waiver of fines for a number of road traffic-related offences. General Him Yan, deputy National Police chief in

  • Pursat Ford assembly plant opens

    The Kingdom’s first Ford assembly plant was inaugurated on June 16 in Pursat province amid rising demand for brand-new vehicles among Cambodians. The facility is seen as a game changer for the domestic automobile industry, which could bring a wave of investors seeking to cash

  • Siem Reap’s $18M zoo said to educate public, help wildlife

    Angkor Wildlife and Aquarium Co Ltd has invested $18 million in a zoo in Siem Reap province, which will be opened in October to educate and promote animal conservation as well as attract national and international tourists. Currently, the Angkor Wildlife and Aquarium is building the

  • Volunteer scheme to foster ‘virtuous’ humanitarian spirit

    A senior education official said volunteer work contributes to solidarity and promotes a virtuous humanitarian spirit among the youth and communities. Serei Chumneas, undersecretary of state at the Ministry of Education, Youth and Sport, made the comment during the opening of a training programme called “

  • Angkor photo rules clarified

    The Apsara National Authority (ANA) denied that it had banned the use of camera tripods in the Angkor Archaeological Park, explaining that the confusion stemmed from a long-standing rule which required commercial photographers and videographers to apply for permission to film. The explanation followed a

  • $50B infrastructure plan en route

    The government’s upcoming $50 billion,10-year infrastructure master plan will provide tremendous investment opportunities for domestic and foreign entities, transport experts and economists say. Minister of Public Works and Transport Sun Chanthol revealed the plan to Japanese ambassador to Cambodia Masahiro Mikami on June 15. At