New barrier to weigh on car imports

The number of imported cars in March was 25 times higher than in the previous month

After overcoming the barriers of Decree 116 on the VTA certificate, in early March, the first automobile batches enjoying tariff exemption have arrived at the seaports and opened a strong flow of completely built up (CBU) cars imported from ASEAN countries.

According to the General Statistics Office (GSO), an estimated 5,000 CBU cars were imported to Vietnam worth $115 million, equivalent to around $23,000 per vehicle in March. This is 25 times higher than in the 200 in the previous month, and nearly 15 times higher than the first month of the year (340).

CBU cars imported from Thailand and Indonesia will start arriving to the country from this month. Import tariff has been reduced from 30 per cent in 2017 to 0 this year, thereby the selling price of made-in-ASEAN automobiles will reduce by 20 per cent compared to last year. Consumers could buy a CBU automobile at the lower selling price after a long wait.

However, the imported car market is facing a new worry. The Government Office has just released a document containing directions from Deputy Prime Minister Trinh Dinh Dung to the Ministry of Science and Technology (MoST) and the Ministry of Transport (MoT).

The DPM requested the two ministries to coordinate with other ministries and agencies in reviewing, building, and perfecting Vietnamese Standards for CBU cars in order to guarantee state management on the quality of imported cars and comply with international integration commitments.

Vietnamese Standards is known as a new technical barrier to tighten CBU cars in the coming time. As Circular No.20/TT-BCT (the document previously regulating car imports) has expired and Decree 116 has been one-upped by the higher standard requirements of the new Vietnamese Standards, car imports are expected to be tightened to facilitate domestic assembly and manufacturing.

On the other hand, experts said the global automobile industry has been developing for a hundred years now, and has achieved technological and technical heights that are far superior to Vietnamese Standards. Therefore, the new regulations and standards may not stop car imports to Vietnam.

Representatives of some car businesses said that the new barrier will increase the number of procedures and certificates required to import CBU cars.

Meanwhile, the automobile market has not yet exploded with the amphibious landing of automobiles from ASEAN countries.