Vietnam Automobile Business and Manufacture in the context of integration: Advantages and Challenges

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The speakers at the seminar.

The seminar was organized by the Customs Newspaper and LeBrothers Group.

There were representatives from the General Department of Vietnam Customs of the Ministry of Finance, the Registry Department under the Ministry of Transport; import enterprises, Vietnam Automobile Business and Manufacture, and numerous media agencies.

At the beginning of the seminar, Mr. Laurent Genet – the CEO of automobile import enterprises and VIMS 2016 said: “Vietnam's automobile market is very potential and increasingly developing, especially after free trade agreements have been signed. This brings more value to the business community as well as to the automotive industry in Vietnam, accompanied by many challenges related to transportation infrastructure, tax policies and management policies, etc.

Mrs. Vu Thi Anh Hong, the Editor in Chief of the Customs Newspaper also mentioned about “Business and automobile manufacture in Vietnam in the context of integration and the role of State management".

Accordingly, she gave an overview of the domestic automotive market in the last 3 years with a very high growth rate. Specifically, in 2014, the automotive consumption in Vietnam reached 157,810 vehicles, an increase of 43% compared to 2013. In 2015, the automotive consumption in Vietnam reached 244,914 vehicles, an increase of 55% compared to 2014. In the first 9 months of 2016, the automotive consumption in Vietnam reached 214,398 vehicles, an increase of 31% compared to the same period last year.

This growth rate is in accordance with the context of macroeconomic stability and the growing income of citizens.

In 2016, enterprises importing automobiles have suffered a lot of pressure. The change in management policies has caused much trouble for these enterprises.

In particular, Circular 20/2011/TT/BTC of the Ministry of Industry and Trade which had a huge impact on automobile business activities lapsed from September 1, 2016. However, the delay in the issuance of legal documents on management of automobile business and manufacture has put enterprises in difficulty. Many businesses are in a state of "waiting" policies to decide how to operate.

Therefore, in the seminar, a number of issues were discussed such as: Commenting on the growth rate of the Vietnam automobile market in the coming period; The trend of automobile production and import in the context of integration; how do the management policies have an impact on the Vietnam automobile market and what adjustments are required to support the market?

At the seminar, Mrs. Dao Thu Huong, the Deputy Director of Import and Export Tax Collection Inspection Department (under the General Department of Vietnam Customs) said that the automobile import in 2016 had declined because many enterprises are waiting for changes related to State management policies.

In recent times, authorities have been focusing on solutions to prevent trade fraud through the declarations of taxable value. However, along with the efforts of the direct authorities, there is a need for the active participation of relevant Ministries and automobile enterprises.

However, Mrs. Huong also emphasized that when drafting management policies, authorities must consider many issues, both to ensure the enforcement of the provisions of the law and to facilitate enterprises and consumers to buy a car with a reasonable price and a high quality.

Mr. Nguyen Quang Son, the representative of the Department of Customs Supervision and Management (under the General Deparment of Vietnam Customs) also said that in addition to changes of tax policies, enterprises and direct authorities were waiting for decisions related to Circular 20/2011/TT-BCT. He suggested that there was a need for technical barriers to tighten the management of goods as well as to protect the interests of consumers. In addition, he also desired the authorities to soon issue official decisions to ensure consistency in management.

Mr. Nguyen To An, Head of the Motor Vehicle Administration Division under the Vietnam Registry Department said that the quantity of manufactured and imported vehicles depended on the demand of the domestic market. Specifically, in 2014-2015, when authorities tightened rules on the weight of trucks, the number of trucks increased dramatically.

On behalf of import automobile enterprises, Mr. Tran Tan Trung, the CEO of Lien A Joint Stock Company stressed that all businesses which invested in the long-term in Vietnam desired to have fair tax policies in production and business. He also said that the import of vehicles was not a monopoly, but this was the choice of enterprises with strict criteria in order to protect the interests of consumers. In Vietnam, because the market capacity is quite small, firms focus on a few units which can ensure successful implementation of warranty, maintenance and sale of vehicles to offset costs.

Vietnam experiences extensive economic integration Vietnam is participating more extensively in international economic integration activities thus helping expand the country foreign trade ...

Concluding the seminar, Mr. Laurent Genet, the representative of automobile import enterprises and VIMS 2016 reaffirmed that enterprises desired to have a healthy and equal business environment with consistent and stable policies.