Vietnam introduces protective policy for domestic car industry

November 23, 2016 | 08:47

(0) user say

Producing, assembling, and importing cars has officially become a field where enterprises must satisfy specific conditions to do business.

This morning, the National Assembly ratified the Law on amending the list of conditional fields in the 2014 Law on Investment. 79 per cent of National Assembly deputies approved of adding producing, assembling, and importing cars to the list.

The amendments will become effective on July 1, 2017 for the above activities as well as the sales of hidden GPS trackers or equipment and software to record sound and images.

Except for the fields already stipulated as conditional in the unamended 2014 Law on Investment, the remaining fields will be conditional starting from January 1, 2017.

After the amendments, the list now includes 243 fields and will be a basis for the government to build a detailed decree regulating automobile business activities.

The Ministry of Planning and Investment drafted the law. As reported by Vietnam News Agency, at a November 10 press meeting in Hanoi, Deputy Minister of Planning and Investment Dang Huy Dong said that besides outlining conditions to protect consumers against low-quality vehicles and promote safety, the piece of legislation will boost the development of automobile manufacturing and assembling enterprises in Vietnam by striking a balance between them and car importers.

He said manufacturers and assembly companies have their hands full with developing factories and distribution systems and training workers, while importers only buy cars from abroad and sell them on for profit.

“We do not think this is equality. If this continues, no one will pour capital into production and assembly anymore,” said Dong.

The 2014 Law on Investment stipulated no conditions for producing, assembling, and importing cars. Safety assurance is done through regular checks by the Vietnam Registry.

In 2018, as part of its commitments under the ASEAN Economic Community, Vietnam will remove all tariffs on completely built cars imported from the ASEAN. The domestic automobile industry has only a year to gear up for the expected competition. Many car producers in Vietnam have expressed hopes that there will be policies put in place to protect the domestic industry so that they would not have to close shop.