Indonesia tries to jump-start car exports to Vietnam

The Indonesian government is planning to change the vehicle type approval (VTA) certificates it issues in an effort to reopen automotive exports to Vietnam.

"With the VTA adjustment, Indonesian automotive exports are expected to return to the country," the Jakarta Post quoted Indonesian Trade Ministry international trade director general Oke Nuwan as saying.

“The government will convey the change in the VTA certificate to the Vietnamese government to get an immediate response. Hopefully, there will soon be automotive exports to Vietnam,” said Oke.

A new regulation issued by Vietnam designed to protect its own developing automotive industry forced Indonesia to stop exports of completely built-up (CBU) vehicles to the country this month, according to the Jakarta Post.

The new regulation stipulates that traders are only permitted to import automobiles if they can provide valid vehicle registration certificates issued by authorities from the countries of origin.

Original quality control certificates for each vehicle and letters of authorization regarding recalls of defective vehicles from the manufacturers are also required, along with copies of quality assurance certificates provided by the countries of origin.

The regulation also requires importers to have one car from each batch shipped to Vietnam to go through emissions and safety tests.

Under the previous regulation, only one certificate was required for each model of car, regardless of how many batches were imported.

Oke said if manufacturers are reluctant to export their cars to Vietnam, Indonesia could lose around US$85 million in the December-March period.

Last year, Indonesia exported 38,832 CBU vehicles worth US$718 million to Vietnam, according to the Jakarta Post.

Indonesia is also the third largest passenger car exporter to Vietnam, after Thailand and China, with a market share of 13.12%.