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Car imports plummet due to Circular 20
2011-0810
Completely-built-up (CBU) car imports plunged in the first half of July due to the impact of restrictive measures imposed by the Ministry of Industry and Trade.
The new regulation took effect on June 26 and the number of CBU cars imported in this period fell by over 50% month-on-month from 3,133 units to 1,503 units, including 973 cars of less than nine seats, according to statistics of the General Department of Customs.
Car importers attributed the decline to Circular 20 issued by the Ministry of Industry and Trade, which requires automobile importers to fulfill extensive procedures when trading in vehicles under 10 seats.
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 car importers, who have thousands of showrooms nationwide, said that the ministry’s circular had forced numerous companies to go bust because they cannot fulfill the requirements and thus cannot import cars.
The result is that the car market is in decline, according to importers. Banks have limited credit for car buyers as well as sky-high interest rates.
Auto dealers say most buyers rely on bank loans, but the interest rates and tough economic conditions have made them think twice before making a purchase.
Importers are also hampered by the Government’s decision last month to increase registration fees for cars of nine seats or less 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.
Up to July 15, according to customs, nearly 31,500 automobiles had been imported, including more than 20,000 cars of less than nine seats.
The new regulation took effect on June 26 and the number of CBU cars imported in this period fell by over 50% month-on-month from 3,133 units to 1,503 units, including 973 cars of less than nine seats, according to statistics of the General Department of Customs.
Car importers attributed the decline to Circular 20 issued by the Ministry of Industry and Trade, which requires automobile importers to fulfill extensive procedures when trading in vehicles under 10 seats.
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 car importers, who have thousands of showrooms nationwide, said that the ministry’s circular had forced numerous companies to go bust because they cannot fulfill the requirements and thus cannot import cars.
The result is that the car market is in decline, according to importers. Banks have limited credit for car buyers as well as sky-high interest rates.
Auto dealers say most buyers rely on bank loans, but the interest rates and tough economic conditions have made them think twice before making a purchase.
Importers are also hampered by the Government’s decision last month to increase registration fees for cars of nine seats or less 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.
Up to July 15, according to customs, nearly 31,500 automobiles had been imported, including more than 20,000 cars of less than nine seats.
Source: SGT
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