Automobile importers propose to amend import regulations

At least 50 car importers have signed a complaint to be lodged to the Prime Minister and relevant ministries, expressing their protest against the Circular 20, stipulating car import regulations. They said that the legal document will terminate all their business opportunities.
On the morning of May 24, car importers in Hanoi came to an extraordinary meeting, where they discussed the measures to deal with the newly issued Circular 20. The participants brought with them, the stamps of their companies, so that they could sign into a complaint which will be lodged to the Prime Minister, Minister of Industry and Trade Vu Huy Hoang and Minister of Justice Ho Hung Cuong.

An importer said that if government agencies do not amend the circular 20, a lot of car importers will have to shut down their business after June 26.

Under the newly issued circular 20, the importers of cars under the mode of complete built units (CBU) have to show a lot of documents, which, according to car importers, unattainable. In case they can contact necessary agencies to get the necessary documents, it will take them a lot of time because they will have to follow very complicated procedures.

In the document to be sent to the relevant ministries, car importers raised three big questions: First, who will benefit from the circular 20? Second, will the circular help curb the inflation and stabilize the macro economy? Lastly, will the legal document ensure the benefits of consumers and help settle the traffic problems?

There are three types of distributions now existing in the market, including the official import (authorized by manufacturers), the import by domestic automobile joint ventures (mostly the members of the Vietnam Automobile Manufacturers’ Association VAMA) and about 2000 enterprises which import cars under commercial contracts.

The 2000 enterprises now hold about 50 percent of the car market and they have been increasing their presence in the domestic market, thanks to the flexible pricing mechanisms. They are the most redoubtable rivals of VAMA’s members.

Car importers wrote in the complaint that the circular 20 could be seen as a way to protect VAMA’s members, while it will “declare death” to commercial importers. This means that the 2000 enterprises will face the risk of having to shut down their business.

Once the circular 20 takes effect, the domestic car prices will be pushed up, because the number of importers will decrease, thus narrowing the competition among importers.

Director of Thien An Phuc Auto Company, Nguyen Tuan said that car importers support the government’s policies on controlling trade deficit. However, he said the newly issued document has many problems that need to be reconsidered. Tuan stressed that the new decision means the prohibition on brand new car imports.

Businessmen, in order to dodge the laws, will import used cars, Tuan has warned. If so, the domestic market will be flooded with used cars, which will make the efforts to restrict used cars in Vietnam become in vain.

Tuan said that obtaining different kinds of documents for every import deal is an “impossible mission” like “picking up stars on the sky”.

Tuan was one of the first businessmen who signed the complaint yesterday. “We have no other choice. If we do not make complaints, we will have to shut down our business,” he said.

Director of Dong Hai Auto Company, Bui Thanh Hai also agreed that the circular 20 is a kind of prohibiting car importers. “The import car market will fall into the hands of foreigners after a short time,” he has warned.-VnExpress

Tags: Vietnam automotive, Vietnam automotive industry, Vietnam autos market, Vietnam car imports