New circular, a difficult barrier for imported cars to overcome

Circular 03 is a document guiding the implementation of the provisions of Decree 116 of the Government and officially took effect from March 1, 2018. Basically, Circular 03 only clarifies the concepts stated in Decree 116 and specifies in more detail the requirements and procedures... for imported automobiles, but does not "loosen" as previously proposed by many automobile businesses.

In Article 3 on "interpretation of terms", Circular 03 clearly states the concept of "foreign competent agencies and organizations" as agencies and organizations that are approved, recognized, and acknowledged by foreign countries according to the law and have the function of issuing documents such as: Vehicle Type Approval (VTA); documents on the results of assessing the quality assurance conditions of foreign automobile manufacturing and assembling enterprises for factories producing imported automobile models; circulation registration certificates or documents of equivalent legal value.

Some businesses believe that it is entirely possible to implement the provisions of Circular 03, although not entirely easy.

Among the many documents and procedures required to meet the conditions for importing cars, the most important document is the VTA. According to the explanation of Circular 03, this is a certificate of technical safety and environmental protection for car models or includes a certificate of technical safety and environmental protection for car models and a certificate of environmental protection for car models or engine models.

The next notable point in Circular 03 is the clarification of regulations on batch-by-batch inspection and a system of documents to check technical safety quality and environmental protection.

According to this regulation, each car model representing each car type in each imported car batch must be inspected and tested for emissions and technical safety quality. For example, if a car batch imported by a business has 3 car types, each type must have a car randomly selected for inspection.

Thus, with Circular 03 detailing, guiding implementation and clarifying the concepts stated in Decree 116, businesses can begin to complete all procedures and paperwork to import cars.

Before Circular 03 was issued, a number of large enterprises said they had to struggle and wait because they did not know how to specifically complete the procedures in accordance with regulations.

However, without loosening regulations as some members of the Vietnam Automobile Manufacturers Association (VAMA) have proposed, Circular 03 remains a difficult barrier to overcome for many car import businesses.

Especially with some Japanese car manufacturers. Talking to reporters, representatives of some car manufacturers such as Toyota or Honda all said that Circular 03 and higher Decree 116 are no different from a high "wall" that they cannot overcome to import complete cars, at least in the next 3 months.

Even with the tightening regulations of Decree 116, even parent corporations such as Toyota and Honda in Japan have said they will stop producing cars for export to the Vietnamese market, including the luxury brand Lexus.

On the contrary, some other businesses, mainly those importing cars from Europe, believe that it is completely possible to implement the regulations in Circular 03, although not entirely easy.

Before Circular 03 was issued, a representative of Thaco Group (the importer and distributor of BMW, MINI and Peugeot brands) said that businesses only need to clearly understand the regulations on which specific agencies have the authority to issue each type of certificate to be able to implement it.

Right at the time of launching the BMW and MINI brands, BMW Group representatives also affirmed that they would ask the German Government to support Thaco in importing and distributing BMW and MINI cars in the most convenient way.

Although the regulations have been specifically guided for implementation, with strict requirements, Circular 03 is still considered a "barrier" that is difficult to overcome for imported cars.

According to many businesses, it will take at least 4-5 months, or even longer, to complete the procedures before imported cars can arrive in Vietnam. During that time, the car market will certainly be very gloomy.

In addition, with the regulation on random inspection of each batch of cars, the waiting time and cost of inspection will cause the price structure of cars to change and almost naturally, the retail price of imported cars will be increased. "This will be a significant disadvantage for consumers if businesses have no room to "cut" costs," said the director of a car distribution company.