Imports have increased again after several months of dropping as the Vietnamese Government issued Decree 116 in October last year, stipulating the conditions for production, assembly, import and business of automobile warranty and maintenance services, which auto importers in Vietnam deem as obstacles, especially regulation required the Vehicle Type Approval (VTA) Certificate to be issued by the exporting country.
The jump in imports indicates that importers have found ways to fully meet the requirements of Decree 116.
Under the ASEAN Free Trade Agreement commitments, the import tax rate of cars from ASEAN countries became zero percent in January this year. Under this policy, at least 40% of the parts used in each vehicle must be made in the country of origin.
After the approval by Vietnam’s Ministry of Transport of the VTA certified by the governments of Thailand and Indonesia, businesses have started importing the first batches of cars with the tax rate of zero percent.
Insiders anticipated that Thai and Indonesian cars would enter the Vietnamese market on a large scale beginning in this April, triggering a surge in imported cars in the coming time.
This month witnessed the import of around 2,000 vehicles of Honda Motors from Thailand after the company stopped car exports to Vietnam for more than a month. Car from other countries such as Indonesia and Malaysia are also expected to soon come to Vietnam.
Global automakers have been predicting that imports from Thailand and Indonesia would flood the Vietnamese market after the tax fell to zero, taking some of the wind out of the sails of domestic manufacturing and assembly, said auto expert Nguyen Minh Dong.
The GSO reported that about 5,000 cars worth US$115 million were imported to Vietnam in March, marking an increase of 25% in volume and 8.2% in value as compared with February.