Imported cars 'not for sale' in early 2018 in Vietnam

Decree 116 has become an obstacle preventing companies from importing cars to Vietnam before March 2018.

In early December, Ford Vietnam sent a letter to dealers to inform customers about cutting January and February orders for the Ranger and Explorer models. The contract will only be signed when there is confirmation of supply from Ford Vietnam. The American car company also does not know when the cars will be available again. The reason Ford gave was due to problems with Decree 116.

Previously, the Government issued Decree 116 regulating the conditions for automobile business, which included barriers for imported cars, even genuine ones. The two most difficult points were (1) The company needed a certificate of quality of the motor vehicle type provided by a foreign country and (2) each shipment had to take out one car for inspection.

Condition (1) is difficult to achieve because many countries in the world do not provide this type of document for exported vehicles, similar to the fact that the Vietnam Registry only inspects vehicles circulating domestically and does not have the authority to issue it for exported vehicles.

Condition (2) increases the cost and waiting time for the car. Each car inspection costs about 100 million, the time can be from a few weeks to 2 months. The slow delivery of the car will affect the quality of the company's service.

Imported cars like Fortuner are unlikely to arrive in the country before March 2018.

Like Ford, Honda Vietnam also said that it is currently impossible to predict when the next batch of CR-Vs will arrive in the country. The company representative said that if the detailed regulations in Decree 116 are clarified by the end of 2017, the company will place orders at factories abroad, transport, carry out import, export procedures, and customs clearance, and will have goods by at least early March 2018.

Meanwhile, Toyota has not been able to bring in the diesel-powered, single-wheel drive, automatic Wigo or Fortuner in early 2018. The launch date has been pushed back a few months. Other imported car companies are holding back by selling cars imported before January 2018.

The way out that companies are waiting for is the new Draft Circular of the Ministry of Transport, providing detailed instructions on technical inspection of imported vehicles subject to Decree 116.

The Decree states that the Type Approval Certificate is issued by "foreign competent agencies and organizations" but does not clarify which agencies. The new draft defines in detail that there are three types of organizations in this group: (1) agencies assigned to issue type inspection quality certificates, (2) government agencies in charge of the motor vehicle sector such as Thailand DTL, Japan MLIT and (3) external agencies and organizations but authorized or recognized by the government according to signed international agreements (1958 Agreement on Automotive Technical Standards). For example: TUV testing center, UK VCA, Germany KBA.

With many types of organizations regulated, the opportunity for imported car manufacturers to obtain Type Approval Certificates will be more open, in which type (3) has more potential because types (1) and (2) may not have the authority to issue them for exported cars.

If the regulations on Type Approval Certificates are released, there is hope for imported cars to return to the country. All companies are uncertain and say that all plans for the new year must be postponed to wait for policies.

Meanwhile, customers are concerned that imported car prices may increase due to shortages. Manufacturers reassure customers that this is unlikely to happen because the number of people who need to buy cars this year is small, most of them are determined to wait until 2018. However, experts say that prices may increase slightly due to lack of supply for some imported car models that have high sales.

The Vietnamese auto market at the end of 2017 was different from previous years when it was not as vibrant as usual. Sales of the entire industry decreased, car prices continuously dropped deeply but customers were still not interested. Buyers were waiting for a 2018 with price breakthroughs. Currently, some companies such as Toyota, Truong Hai, Hyundai Thanh Cong have announced prices for 2018 with insignificant reductions compared to the end of 2017.

According to VNE