Will the new regulations cause price increases for many types of cars?

Prices for trucks and passenger vehicles with 16 seats or more may increase by 15-20% in the near future due to the inability to postpone the implementation of Euro 4 emission standards to protect the environment.

Commitment to the environment

According to Decision No. 49/2011/QD-TTg on the roadmap for applying emission standards to assembled and imported automobiles and motorcycles, from January 1, 2017, new automobiles and motorcycles must meet emission standards at level 4 (Euro 4), and by January 1, 2020, they must meet emission standards at level 5 (Euro 5).

Previously, a number of associations and businesses had requested a postponement of the decision's implementation for passenger vehicles with 16 seats or more and trucks due to insufficient preparation.

The implementation roadmap for Euro 4 standards is mandatory for all new cars, motorcycles, and other vehicles manufactured, assembled, and imported from January 1, 2017.

Recently, the Ministry of Transport sent a document to the Prime Minister proposing a one-year postponement of the application of Euro 4 standards for domestically produced and assembled diesel passenger cars, pickup trucks, and vans, until January 1, 2018. For other types of diesel cargo vehicles (excluding pickups and vans), the postponement would be until January 1, 2022, a further five-year extension.

For other light-duty vehicles (passenger cars with 9 seats or fewer) using gasoline engines that are manufactured and assembled domestically (but all bearing foreign brand names), the implementation schedule for emission standard level 4 from January 1, 2017, remains unchanged.

However, speaking at the regular government meeting in February 2017, the Prime Minister disagreed with the above proposal and demanded strict implementation, resolutely stating that environmental protection should not be overlooked for the benefit of certain sectors or fields.

Therefore, the implementation of the Euro 4 standard is mandatory for all new cars, motorcycles, and vehicles manufactured, assembled, and imported from January 1, 2017.

The Euro 2 standard currently applied in Vietnam stipulates a maximum sulfur content of 500 mg/kg for gasoline and diesel. However, the Euro 4 standard limits this to a maximum of only 50 mg/kg.

According to experts, the sulfur content in gasoline is a significant concern. When sulfur is burned, it produces SO2 (sulfur dioxide), which damages the mucous membranes in the respiratory tract and eyes. Up to 95% of SO2 from car and motorcycle engines is released into the environment. Therefore, the lower the sulfur content in gasoline, the better.

Implementing the Euro 4 emission standards aims to reduce environmental pollution and its impact on people's health. This is something that cannot be achieved at the expense of any economic benefits. Many countries around the world have adopted this standard, and Vietnam cannot lag behind in adopting this environmental protection standard.

Will car prices increase?

According to a report by the Vietnam Register, the Euro 4 emission standard has been in effect since January 1, 2017, but to date, only a few businesses have conducted testing, while the majority have yet to register for certification.

Gasoline and diesel produced in Vietnam do not yet meet Euro 4 standards.

Manufacturers, assemblers, and importers of trucks and passenger cars believe that the roadmap for applying Euro 4 emission standards will be adjusted and postponed by 5 years as proposed by the authorities, and therefore have not yet switched.

Most trucks and buses, whether imported as complete units or assembled domestically, still use Euro 2 and 3 standard engines. From January 1, 2017, the Vietnam Registering Authority stopped issuing registration certificates for newly manufactured, assembled, and imported vehicles that meet Euro 2 emission standards.

Currently, hundreds of vehicles are stuck, and businesses are waiting, especially after the Ministry of Transport sent a letter to the Government requesting a postponement of the implementation date.

If these vehicles have to comply with Euro 4 standards, their engines will certainly need replacing. Furthermore, both imported and domestically assembled vehicles will now have to switch to using Euro 4 compliant engines.

According to calculations, switching from Euro 2 to Euro 4 engines will significantly increase vehicle prices. Therefore, the automotive market will see price increases in the near future, particularly for trucks and passenger vehicles with 16 seats or more. However, the extent of the increase will depend on several factors: production costs, taxes, distribution, and market competition.

Businesses have stated that another concern is the lack of quality assurance for gasoline and diesel fuel. Gasoline and diesel produced in Vietnam do not yet meet Euro 4 standards; to meet these standards, they must be imported and sold alongside Euro 2 and 3 gasoline and diesel. With so many different types of fuel available, this creates a significant risk of fraud in the business of these products.

The biggest concern is that Euro 4 engines use substandard, mixed, and uncontrolled gasoline and diesel fuel, which can affect the engine.

The Vietnam Automobile Manufacturers Association (VAMA) argues that the market currently only has 3-4 types of gasoline, and controlling its quality is already difficult. Adding more types would make quality control even more challenging. Substandard gasoline can quickly damage machinery and engines, and poses a significant risk of fire and explosion in vehicles.

When cars use engines that meet Euro 4 emission standards, but use substandard gasoline, the number of breakdowns will undoubtedly increase significantly. Emissions from substandard gasoline continue to harm the environment. Therefore, if new cars and motorcycles are required to use Euro 4 engines, the quality of gasoline meeting Euro 4 standards must also be strictly controlled and widely available.

According to VNN