New rules on passenger car imports to Vietnam could cost Indonesia US$85 million (Rp 1
New rules on passenger car imports to Vietnam could cost Indonesia US$85 million (Rp 1.15 trillion) in lost exports.
Vietnam issued decree No. 116/2017/ND-CP on the requirements for the manufacture, assembly and import of motor vehicles and trade in motor vehicle warranty and maintenance services. The degree specifies several import requirements, including a vehicle’s roadworthiness and its emission and safety standards.
Those requirements could put a burden on Indonesia’s automotive industry, as they make it harder to export passenger cars to Vietnam.
Trade Ministry International Trade Director General Oke Nurwan said Vietnam, through the new regulation, required Indonesia to comply with International standards for roadworthiness, emission and safety. The Indonesian National Standard (SNI) on vehicle roadworthiness, emission and safety do not meet Vietnam’s expectations.
“The potential losses caused by the decree are estimated at $85 million for the period of December 2017 to March 2018,” he said.
“To overcome this issue, we will take a persuasive approach and lobby Vietnamese authorities. We have set up an Indonesian delegation to conduct negotiations with Vietnam regarding this issue.”
The delegation consists of staff from the Trade Ministry, the Transportation Ministry, the Industry Ministry and the Foreign Ministry as well as the Association of Indonesian Automotive Manufactures (Gaikindo). The team is scheduled to arrive in Vietnam on Feb. 26.
According to Central Statistic Agency (BPS) data, Indonesian passenger car exports to Vietnam from January to November last year amounted to a value of $241.2 million, up significantly from $17.78 million in 2016. Indonesia is also ranked among the top three passenger car exporters to Vietnam, after Thailand and China, with market share of 13.12 percent.
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