New decree a spoke in our wheel, Vietnam carmakers say

By Nguyen Hoai   July 13, 2018 | 03:16 am PT
New decree a spoke in our wheel, Vietnam carmakers say
Vietnamese Government’s Decree No. 116 on car manufacturing has ignited debates from different sides since it came into effect from January 1, 2018. Photo acquired by VnExpress
Auto businesses in Vietnam are complaining that tough provisions of Decree 116 have led to business falling by a third, threatening thousands of jobs.

At the recent mid-year Vietnamese Business Forum (VBF), the Automobile and Motorbike Working Group had several complaints about the decree on car manufacturing, assembly, importation and warranty offering took effect on January 1, 2018.

Toyota Vietnam general director Toru Kinoshita, who heads the group and is also chairman of the Vietnam Automobile Manufacturers' Association (VAMA), said some administrative policies in the Decree were making the Vietnamese automobile market “unstable”.

Since the decree took effect, the business of car importers and assemblers in the country has gone down by 31 percent, he said, adding that import of cars from Japan and EU has come to a virtual halt in the first six months of the year with a number of orders being canceled.

“The cancelation of car orders has threatened thousands of direct and indirect jobs in Vietnam. Customers have also had to wait longer to own a car due to low supply,” Kinoshita said.

Data presented by the working group at the forum showed that just one car shipment arrived in the Ho Chi Minh City port and another at the Hai Phong port in the first three months of 2018.

The Government Office has recently released a document citing the opinions and conclusions of Deputy Prime Minister Trinh Dinh Dung at a meeting to evaluate the implementation of the decree.

According to the deputy prime minister, the Vietnamese Government has encouraged the production and assembly of cars in the country to produce high quality products at affordable prices to meet consumer demand and prevent import of poor quality products.

More than 126,000 autos were sold in Vietnam in the first half of the year, 106,600 of them locally assembled and over 19,000 imported ones, according to the VAMA. 

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