Hanoi (VNA)- Vietnam needs to develop its own automobile industry, create favourableimport conditions and ensure production for more than 90 million people.

This was said by Mai Tien Dung, Minister and Chairman of the Government Office,at a conference in Hanoi on February 26. The conference was held to discuss andlisten to the feedback of auto businesses related to difficulties inimplementing the Government’s Decree 116/2017/NĐ-CP on automobiles and thetransport ministry’s guiding Circular 03/2018/TT-BGTV.

Decree 116 stipulates the conditions for production, assembly, import andbusiness of automobile warranty and maintenance services, issued on October 17last year. After the issuance, many companies, such as Honda and Toyota, havestopped importing cars into Vietnam. Ford, Nissan and Mitsubishi also announceda halt on import.

By early 2018, the Ministry of Transport issued Circular 03 to guide theimplementation of Decree 116. Although it is expected to “unravel” the problemsof enterprises related to Decree 116, the circular continues to receivecontrary feedback from many enterprises.

Dung said as a developing country, Vietnam’s policy was to deepen itsintegration into the region and the world. “Not to mention Vietnam will becomean automobile market for firms and countries, but we will have our own choices.There’s no protection to the majority of domestic production, but it needsattention to some extent,” said he.

He said it was evident from the manufacturers of Toyota and BMW that thepolicies of Vietnam had created consistent favourable institutional frameworkfor enterprises to invest and expand production in the country.

Dung, however, said that the Government recognised the need to listen morethoroughly to the issues related to Decree 116. 

Recommendations would then be submitted to the Prime Minister in accordancewith the country’s policies and international practices.

“There are issues, including Vehicle Type Approval (VTA) certificate, road testfor autos and inspection of every batch of imported auto, that we need tolisten to more," he said.

He cited the examples of road test, checking the vehicle in the most favourablecondition, reducing clearance time, among others. There’s a need for riskmanagement to ensure traffic safety, product quality and environmentalprotection. This was the requirement of the Prime Minister and should beabsolutely implemented, said Dung.

At the conference, there were arguments on Decree 116 and Circular 03, withextreme opinions emerging.

The first comments came from companies such as Toyota, Ford and GM, whoexpressed deep concern about some of the administrative regulations in Decree116. They said the regulations were not in accordance with internationalstandards and that it disrupted and almost stopped cars from being importedinto Vietnam.

[Auto imports drop following government’s new decree]

These companies urged the Government to postpone the implementation of thedecree.

They specifically argued that the regulation on VTA certificate on importedcars issued by foreign competent agencies and organisations was not in linewith international practices. According to them, countries only issuecertificates for domestic vehicles, not for those exported.

Inspection rules for each batch of imported vehicles were also considered to bedifficult and expensive for the businesses.

The companies disagreed with the requirement to have a test track with aminimum length of 800m citing technical difficulties, expensive land fund andinvestment. In addition to these, car manufacturers have different technologiesto ensure quality, not necessarily an 800m long road test, they said.

General Director of Ford Vietnam Pham Van Dung, said auto enterprises hadlittle time to prepare before the decree came into effect on January 1, 2018.“Ford does not dare to accept orders because if the imported car does not meetthe decree’s requirements, the firm will have to re-export it. That is aproblem because the importing countries have different requirements,” he said.

The second opinion came from representatives of domestic auto enterprises, suchas Truong Hai Automobile Joint Stock Company (Thaco) and Hyundai Thanh Cong.

Thaco Chairman Tran Ba Duong asserted the VTA certificate was needed to protectthe environment and ensure safety of users.

He said the certificate need not be issued by State authorities but may beissued by other competent organisations. He cited the example of Germanvehicles, which can obtain certificates from organisations in other countries.

Le Ngoc Duc, General Director of Hyundai Thanh Cong, agreed with Duong andstressed that if a locally manufactured car was tested, the imported car mustalso be tested. The VTA certificate is the first basis for Government agenciesand consumers to evaluate whether the imported vehicle meets theirrequirements, he said.

Both Duong and Duc agreed that Decree 116 had created an environment of equalcompetition between manufacturers and importers of cars.

“I think we should not postpone the implementation of the decree because itwould not be fair to businesses that are trying to meet the requirements,”Duong said.

Meanwhile, Deputy Minister of Industry and Trade Do Thang Hai and DeputyMinister of Transport Le Dinh Tho emphasised the need to protect consumers’interests and the environment as well as ensure fair competition amongenterprises.

After listening to ideas from the participants, Minister Dung affirmed thatDecree 116 was drafted carefully before being issued to gather ideas frombusinesses and relevant subjects. It aimed to create better policy to attractinvestment from foreign and domestic businesses to produce quality cars, hesaid, adding that the Government would continue its efforts to improve thedomestic business environment, lift barriers and improper procedures and payattention to develop and support the auto industry.

The minister proposed to foreign agencies, associations and businesses tosupport Vietnam’s policy on developing its automobile industry to beself-sustainable and to accelerate localisation rate (the rate of partsmanufactured locally) through tax policies.

“Today, we do not conclude here, but we take seriously the inputs and willoffer concrete solutions in the shortest time possible. Next week, theministries and agencies will review every aspect and issue,” the minister said.

The conference was attended by representatives of the embassies of the UnitedStates, Japan, the Republic of Korea and the European Union, in addition torepresentatives of business associations and automobile manufacturing andtrading enterprises in Vietnam.-VNA