Imported cars are about to flood into Vietnam.

Regarding the concerns raised by car manufacturers about difficulties in importing automobiles into Vietnam due to Decree 116, the Ministry of Transport, in a report submitted to the Government Office, stated that many businesses have understood the regulations and are continuing to prepare the necessary procedures and conditions to conduct automobile import business in accordance with the regulations.

Regarding the requirements for Vehicle Type Approval (VTA) certificates, component type approval certificates (tires, rearview mirrors, headlights, glass) as stipulated in Circular 03, the 800m test track requirement, and batch inspection, the Ministry of Transport believes these provisions are consistent with market realities, control the quality of imported automobiles, and create fairness for domestically assembled vehicles.

Regarding the issue of emissions and safety testing for each type of car in an imported shipment, which could increase costs by up to $10,000, the Ministry of Transport stated that there is "no basis" for this. According to the Ministry's calculations, the cost of emissions testing is 27 million VND for gasoline engines and 28 million VND for diesel engines. The completion time should not exceed two days.

The safety test cost is 12 million VND per prototype. The completion time is no more than two days, and the test report is issued the following day if the company provides sufficient technical documentation for the prototype vehicle.

Representatives from several domestic car manufacturers such as Toyota, Honda, Ford, and Suzuki have stated that they have submitted the necessary documents for imported cars to the relevant authorities and are awaiting an official decision. It is highly likely that the procedures will be completed soon.Overcoming the VTA (Vehicle Type Approval) paper barrier, the biggest difficulty among the stricter regulations on imported cars under Decree 116, imported cars are expected to return to Vietnam as early as the second quarter of 2018, starting with cars imported from Thailand.

Previously,The Ministry of Transport has accepted the Vehicle Type Approval (VTA) certificate issued by the Thai government for vehicles exported from Thailand to Vietnam. A shipment of thousands of Honda vehicles arriving at Hiep Phuoc port, Ho Chi Minh City, in early March 2018 is one example.

Mr. Pham Anh Tuan, General Director of Strategic Planning at Toyota Vietnam, said that Indonesia has sent the Vehicle Type Approval (VTA) certificate to Vietnam and is awaiting confirmation. If Indonesia cannot export vehicles to Vietnam, it could suffer losses of $85 million between December 2017 and March 2018.According to calculations by the country's Ministry of Commerce. Meanwhile, regarding vehicles imported from Japan, Toyota Vietnam has also obtained the necessary permits for the Lexus NX300t and Toyota Hiace, which will soon arrive in the country and clear customs within the next few months.

Thailand and Indonesia were the two largest exporters of completely assembled cars to Vietnam in 2017, totaling nearly 47,000 vehicles. Models eligible for a 0% import tax and meeting the 40% localization requirement for components from these two countries spanned various segments, including compact cars, MPVs, SUVs, and pickup trucks.

The VTA certificate for imported European cars, primarily luxury models, is a significant requirement. Unlike Japanese automakers who are complaining about the difficulties, Volkswagen, Porsche, Truong Hai (BMW), and many other brands remain calm about this regulation. Following Honda, the first imported Volkswagen models from India and Mexico have also arrived in Vietnam, demonstrating the European automaker's confidence in its ability to meet the requirements of Decree 116.

Thus, about five months after Decree 116 came into effect, the controversies and petitions from car manufacturers began to subside as the more pressing issue now was figuring out how to meet the VTA (Vehicle Type Approval) requirements for imported vehicles. The prospect of imported cars flooding into Vietnam with a 0% tariff, a necessary condition for establishing lower prices compared to 2017, is gradually becoming more positive.

The optimistic signs from car manufacturers in Vietnam regarding the VTA (Vehicle Type Approval) process are also reflected in the actions of dealerships. After a period of stagnation before the Lunar New Year, car ordering and sales activities have resumed. Attention is focused on new Honda models arriving in the country, such as the CR-V and Jazz. Meanwhile,Toyota Fortuner, Ford Ranger, and many other models are also available for booking at dealerships, although the exact delivery dates cannot yet be determined.