In an attempt to shrink trade deficit and improve traffic safety, the Ministry of Industry and Trade has recently issued the Circular 20 on additional procedures for passenger automobiles with nine seats or less. The new ruling will take effect on June 26, 2011. As soon as this circular was released, many car importers raised their voices against the policy and imported more prior to the effective date of the circular.
Adding many new procedures
According to the Circular 20, automobile importers will need more papers to continue with their business. They must show the following papers to the State authorities: Appointment or authorization certificate or authorized agent contract, warranty and maintenance certificate.
With this new circular, the Ministry of Industry and Trade expects to see a reduction in imported automobiles from July although the import volume may rise 30 percent in May and June. The volume of imported automobiles set a new record of 21,406 units worth US$392 million in April, up 63 in volume and 72 percent in value from the same period in 2010.
Shortly after the circular was made public, automobile importers complained that they could not be able to have enough papers before June 26. Many are quickening shipments to Vietnam before the date comes while some are keeping the stock for higher prices.
Buying procedures
A span of nearly two months from the date of announcement to the date of enforcement is not long enough for car importers to have all papers. Many are considering closing their business because many papers are out of reach.
Mr Nguyen Van Vuong, Director of Imcapo Company - a car importer, said most of auto showrooms or salons in Vietnam are buying vehicles from foreign intermediaries and they can only show sales contracts, registration certificates and quality certificates. Moreover, some papers must be done in foreign nations and this requirement is really a big challenge for importers.
This new rule also raises difficulties for foreign car companies in Vietnam. According to the new regulation, an auto importer shall have authorization certificates from manufactures. But, big names like Toyota or GM Motor also have manufacturing facilities in Vietnam and they already have distribution systems in the country. They may not be granted sales authorization papers because they already have sales systems in Vietnam which sell their products assembled in Vietnam.
An official from a car importer said the Circular 20 is clearly “protecting” local auto manufacturers and assemblers which have already had many preferences.
Mr Vuong wondered why the Ministry of Transport has not issued requirements for granting the above certificates or named agencies in charge of this work.
Huong Ly
Vietnamese
