Trade ministry wants tough rules retained to manage car imports

In a recent report to the Prime Minister, the ministry said that the decree, which set tough conditions on the origin, testing and quality for car imports, has played an important role in protecting the production and assembly of cars in the country. The decree came into effect in January 2018.

In 2018, the number of domestically assembled cars was 3.72 times bigger than imports, up from 2.5 times in 2017. Local production rose 10 percent in the first half of 2018, the ministry said.

According to data from the Vietnam Automobile Manufacturers’ Association (VAMA), imported cars plunged 49 percent in the same period.

However, this advantage could not be maintained in the long term, and the domestic assembly to import ratio has already fallen back to 1.74 times in the first half of 2019. As a result, it is important to keep the decree to continue managing car imports, the ministry noted.

Domestically assembled cars must also comply with the same quality conditions, it added.

The domestic automotive industry is facing rising competition from cars manufactured in other ASEAN countries which are subject to zero percent import taxes after the ASEAN Trade in Goods Agreement (ATIGA) came into effect January 2018.

"Vietnam’s domestic production is likely to decrease in the near future, so there needs to be measures to support domestic manufacturers and assemblers. Imports need to be maintained at a reasonable level given the country’s increasingly extensive economic integration and to develop the local automobile industry," the ministry said.

Vietnam imported over 96,000 completely-built-up units worth a total of $2.1 billion in the first eight months of this year, according to the General Statistics Office.