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Auto imports increase sharply ahead of restrictions
2011-0714
The importation of completely-built-up (CBU) cars in the first half of this year increased strongly as traders sought to avoid restrictive measures imposed by the Ministry of Industry and Trade.
In the first half of June alone, the number of CBU cars imported surged by 42% month-on-month to 3,133 units, according to statistics of the General Department of Customs.
In the year to June 15, according to the customs, nearly 30,000 automobiles worth US$561 million had been imported, including more than 20,000 cars of less than nine seats worth US$259 million.
The soaring import is attributed by experts to Circular 20 recently issued by the Ministry of Industry and Trade, which requires automobile importers to fulfill more procedures when trading in vehicles under 10 seats as from June 26, 2011. These restrictive procedures include a letter of attorney from producers, agent contracts legalized by Vietnamese diplomatic offices overseas and auto maintenance certificates granted by the Ministry of Transport.
Unauthorized auto importers who have thousands of showrooms nationwide said that the ministry’s Circular would force numerous import car companies to go bust because they will find it difficult to obtain the documents as required. So they had rushed to import cars before Circular 20 came into force.
The owner of an imported car showroom on Nguyen Oanh Street in the city’s Go Vap District said that his company just imported more than 20 cars from South Korea to avoid the preventively stringent requirements specified in the circular.
Many unauthorized auto importers said that up to now they cannot fulfill the requirements.
Nevertheless, the ministry insisted on the need for car importers to disclose the legal origins of vehicles because consumers need to be better protected.
Some unauthorized auto importers said they will shift to importing used cars. But, the Ministry of Finance is compiling a draft decision raising the tax on used passenger cars. If the draft document is approved by the Prime Minister, luxury cars will find it harder to penetrate Vietnam.
Auto importers said that it was difficult to do car business now given all the new restrictive policies, including a decision by the Government in the middle of this month to raise the registration fees for cars of nine seats or below to the 10-20% range from the current 10-15% with effect from September 1 this year.
Traders said import and excise taxes are already high, so the higher registration fees would pile more pressure on car prices. There is a high possibility that the market could contract this year, they said.
In the first half of June alone, the number of CBU cars imported surged by 42% month-on-month to 3,133 units, according to statistics of the General Department of Customs.
In the year to June 15, according to the customs, nearly 30,000 automobiles worth US$561 million had been imported, including more than 20,000 cars of less than nine seats worth US$259 million.
The soaring import is attributed by experts to Circular 20 recently issued by the Ministry of Industry and Trade, which requires automobile importers to fulfill more procedures when trading in vehicles under 10 seats as from June 26, 2011. These restrictive procedures include a letter of attorney from producers, agent contracts legalized by Vietnamese diplomatic offices overseas and auto maintenance certificates granted by the Ministry of Transport.
Unauthorized auto importers who have thousands of showrooms nationwide said that the ministry’s Circular would force numerous import car companies to go bust because they will find it difficult to obtain the documents as required. So they had rushed to import cars before Circular 20 came into force.
The owner of an imported car showroom on Nguyen Oanh Street in the city’s Go Vap District said that his company just imported more than 20 cars from South Korea to avoid the preventively stringent requirements specified in the circular.
Many unauthorized auto importers said that up to now they cannot fulfill the requirements.
Nevertheless, the ministry insisted on the need for car importers to disclose the legal origins of vehicles because consumers need to be better protected.
Some unauthorized auto importers said they will shift to importing used cars. But, the Ministry of Finance is compiling a draft decision raising the tax on used passenger cars. If the draft document is approved by the Prime Minister, luxury cars will find it harder to penetrate Vietnam.
Auto importers said that it was difficult to do car business now given all the new restrictive policies, including a decision by the Government in the middle of this month to raise the registration fees for cars of nine seats or below to the 10-20% range from the current 10-15% with effect from September 1 this year.
Traders said import and excise taxes are already high, so the higher registration fees would pile more pressure on car prices. There is a high possibility that the market could contract this year, they said.
Source: SGT
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