Imported cars are not yet happy but already worried

After the Ministry of Transport approved the Vehicle Type Approval Certificate (VTA) provided by the Governments of Thailand and Indonesia, car importing enterprises can be considered to have overcome the "barrier" of Decree 116.

Very quickly, at the beginning of March 2018, the first batches of cars enjoying 0% import tax arrived at the port, opening the way for a massive influx of completely built-up (CBU) cars originating from ASEAN countries.

It is expected that starting from April 2018, CBU cars imported from Thailand and Indonesia will be flooding into the country. The consumer’s job now is to prepare themselves mentally to sign contracts to buy cars at lower retail prices than before.

The wait is worth it, perhaps the prevailing sentiment at this time among both consumers and car importers. Because, with the import tax rate reduced from 30% in 2017 to 0% this year, the retail price of cars originating from ASEAN will decrease by around 20% compared to before.

The wait is worth it, perhaps the prevailing sentiment at this time among both consumers and car importers. Because, with the import tax rate reduced from 30% in 2017 to 0% this year, the retail price of cars originating from ASEAN will decrease by around 20% compared to before.

However, when tax-free imported cars have not yet reached the majority of consumers, the imported car market is facing a new concern.

On March 22, 2018, the Government Office issued an official dispatch conveying the direction of Deputy Prime Minister Trinh Dinh Dung to the Ministry of Science and Technology and the Ministry of Transport.

Specifically, the Deputy Prime Minister directed the Ministry of Science and Technology and the Ministry of Transport to "coordinate with relevant ministries and agencies to continue reviewing, developing and perfecting the system of Vietnamese Standards and Vietnamese Technical Regulations for imported automobiles, ensuring state management requirements on strengthening the management of imported vehicle quality, while complying with international integration commitments".

Basically, this system of standards and regulations will be like a new technical barrier that will cause certain difficulties for CBU cars in the future.

After Circular 20 of the Ministry of Industry and Trade expires and the regulations in Decree 116 of the Government have been "overcome" by enterprises, the new system of standards and regulations will more or less continue the task of filtering imported cars and partly support domestically produced and assembled cars. This is also considered appropriate to facilitate the goal of developing the domestic automobile industry.

Some opinions say that the world automobile industry has a history of hundreds of years of development, the level of technology is also at a very high level and even many regulations or standards of Vietnam have not kept up with the world. Therefore, new standards and regulations will hardly hinder imported cars if only considered purely in terms of technology.

From there, representatives of some businesses commented that it is likely that the new barrier for imported cars will go in the direction of increasing procedures and certifications for technical standards of CBU cars.

Although it is still difficult to imagine what the new system of standards and regulations will be like once completed and put into practice, at least the business community is still worried about the difficulties that the imported car market will encounter.

Meanwhile, at this time, the imported car market has not yet exploded with the influx of duty-free cars from ASEAN countries.