Automotive Business Conditions - The rights of consumers are guaranteed?

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Maintenance and warranty facilities are conditions to protect the rights of customers.

Although affirming the view of "protecting consumers' interests", the provisions in the draft still have some loopholes in the post-sale stage such as warranty, recall of products and intellectual property.

"Loopholes" in warranty

In the draft report to the Government as well as the necessity to issue a Decree regulating the conditions of production, assembly, import and car insurance (hereinafter referred to as Decree), the Ministry of Trade asserted that the Decree was issued to protect consumers' interests, raise the efficiency of State management and gradually realize the development strategy of the automobile industry of Vietnam. Although automobiles are high-tech products with a complex structure; the use and operation, as well as warranty and maintenance, have many loopholes, without strict rules of after-sales services.

It is expected that the Decree will be implemented from 1^st July 2017, but the draft Decree stipulates that until 2020, enterprises must meet the requirements of warranty and maintenance. What is the responsibility of these enterprises for consumers in 3 years (from 2017 to 2020)?

In addition, the draft Decree is quite "easy" when it regulates that there is a need for only one "maintenance" facility. So when the business of importing cars has only one facility in Hanoi, customers who buy cars in other localities in the country can bring car to Hanoi to enjoy benefits from warranty or not?. It is clear that most of the businesses manufacturing and importing cars have a network of maintenance (according to the manufacturer's standards) with many points in different localities. If this provision of the draft is implemented, the movement to set up an insurance company will quite easy, then the rights of consumers will not be ensured and regulations in automobile business are also unfair.

Besides, the draft Decree has not also regulated the need for enterprises to have technical support contract of the manufacturers (including technical training, technical information supply, equipment, specialized equipment).

According to experts, cars include a lot of electronic equipment inside. In order to repair cars now, there is not only a need for the equipment as before but we also need to have the software, specialized technical equipment to detect errors and fix. Thus, there are no enterprises which are eligible for maintenance without the authorization of the manufacturer.

"Lack" of regulations on recall

Another important point is that we lack regulations on recall of products with errors. The regulations stipulate that importers must "commit to the Ministry of Industry and Trade to recall defective vehicles" which makes the recall "impossible". Because, if we are dependent on the "commitment" of the enterprises, when the products are defective, enterprises do not make commitments, so which agencies will check, monitor and handle the problems.

The important point is that recall of vehicles is always the responsibility of the manufacturer and only the manufacturer has the capacity to handle it. In fact, out of the 70 times of recall published on the official website of the Vietnam Register from November 2011 to now, the recall is implemented through the authorization of the manufacturing enterprises. Companies which are not representatives of the automobile manufacturer will not be eligible for the "rights" of recall when the products are defective.

Only the manufacturer knows the exact errors, system failures and problems arising in the process of designing and manufacturing products. The correction of errors and diagnosis of defects in components and assemblies are mostly based on the genuine manufacturers and dealers.

On the other hand, in the case where the Government has sufficient evidence of vehicle failures which cause accidents or harm to society, the Government has the right to require firms to approve applications. For example, the Korean Ministry of Environment asked Volksowagen to recall cars in November 2015, the US government asked Toyota to recall cars in 2010, the Japanese Government asked Ford to recall cars in 2016.

"Lack" of intellectual property

A point which has not been mentioned in the draft Decree is the right to use the brand, image, logo of the products. This is an important issue when the violation of intellectual property in the automobile industry is still going on widely.

Mr. Tran Tan Trung, the Director General of International Lien A Joint Stock Company (distributor of Audi in Vietnam) said: When the company received a contract with a car manufacturer as an authorized agency, it can use a brand name, logo as well as partner’s software.

Therefore, representatives of Truong Hai Automobile Joint Stock Company said that there should be regulations on the right to use trademarks, logo images to show the fairness and transparency of the protection of intellectual property rights, especially when Vietnam has entered into bilateral, multilateral trade agreements.

Not only did VAMA emphasize the importance of after-sales services in automobile business, but VAMA also commented that the provisions in the draft Decree were unnecessary, even overlapping, and difficult to implement,

Despite the innovation, the draft Decree still reveals inadequacies.

According to experts, if inadequacies are not solved, there will be many inferior quality cars and lack of after-sales services nationwide.

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According, in addition to consumers, the State will also work hard to overcome the consequences, especially national traffic safety.