Auto firms feel the heat

The Vietnam Register’s recent requirement to test safety standards of sample car from each batch of imported completely-built unit cars (CBUs) is hurting auto firms.

Auto firms assumed the requirement was unreasonable since these CBU similar versions were earlier checked and got quality certifications from the Vietnam Register.

Firms argued these were global car models which were approved by foreign relevant competent agencies. The cars imported into Vietnam are the same in models with some minor differences related to interior, comfort level or steering wheel position to match Vietnam’s traffic conditions.

“Such requirement goes counter to Clause 7, Item 1 in Ministry of Transport’s Circular 31/2011/TT-BGTVT stipulating that testing is exempted towards sample cars of subsequent batches imported by authorised sales and guarantee agents the same in models with cars getting quality certifications from relevant state agency,” a car business executive commented.

The requirement cast a dent on firms’ sales figures since it could drive up firms’ expenses while customers have to wait for getting needed certifications from registration bodies.

Such requirement came after Vietnam Register officials found most imported double cabin pick up models like Isuzu Dmax, Ford Ranger, Toyota Hilux or Nissan Navara are models not yet approved by foreign agencies.

This would mean manufacturers assembling the cars, ignoring complex checking process abroad and dodging Vietnamese laws to import these cars into Vietnam. The cars thereby might have lower quality than those in foreign markets, according to Vietnam Register.

Vietnam Register made the proposal based on that argument and insisted that the phenomenon had occurred after the Ministry of Industry and Trade enacted Circular 20/2011/TT-BCT imposing stringent requirements on import of under nine seat brand-new cars, which resulted in only auto joint ventures eligible to import cars with almost no competition from commercial firms.

Industry insiders assumed the move would exaggerate firms’ burdens since amid flat sales firms would not import cars in big volumes, while after taking the test a brand-new car would be regarded as a used car with lower selling prices, thus hurting firms’ pockets.

“It is unclear whether the requirement is to shield consumers or to maximise capacity of state invested motorised vehicles gas emission-testing centre. At present, each test at the centre costs around VND100-200 million ($4,700-$9,500),”

“Auto firms are on the tenterhooks since an unexpected policy change would drive up the costs and cause firm headaches,” said car firm representatives.