On June 12, 2018, the Ministry of Industry, the Ministry of Commerce, Automotive Industry Club and Auto Parts Industry Club had rapidly joined hands to discuss solutions to the problem caused by Vietnam’s Non-Tariff Barriers (NTB) which have strictly controlled the car import amidst worries that the problem might lead to negative effects on the production base of Thailand’s automotive industry, despite Thailand had sent a letter of concerns over the delay and export expenses to Vietnam.   

The agreement made among ASEAN countries provides no tariffs, starting with the 40% import tariffs, then being reduced to 30%, and finally now 0%. However, Vietnam is holding things up by examining every Thailand’s imported car instead of taking a random sample, which have caused tremendous delay to the export process.  

A report indicated the reason behind Vietnam’s measure announcement came from the Vietnamese government’s encouragement of more investments in domestic auto industry. VinFast had invested the first phase of auto plant construction in September 2017 with a plan to produce electric motorcycles within September this year. On the other hand, other countries viewed such measure of car examination standards as a trade barrier measure.    

The Ministry of Industry has closely monitored the effects caused by this Vietnam’s trade barrier measure. An official meeting with Vietnam will be held this July for discussing this point of the matter, which is believed to certainly receive a concrete conclusion.    

A source within automotive industry disclosed the discussion with the Ministry of Commerce and the Ministry of Industry to rapidly negotiate with Vietnam. It is to believe that a conclusion beneficial to Thailand would be reached within July during the negotiation. However, if Vietnam would still insist on the measure, Thailand might respond to Vietnam with similar measure on their exported products, but has not yet decided what kind.

Meanwhile, the private sector is considerably concerned since the measure has affected many auto brands whose exports have been delayed. As a result, the export volume to Vietnam during January – April was registered at only 4,000 vehicles instead of 20,000 vehicles. Thailand’s annual export target to Vietnam was at the total of 65,000 vehicles. However, some of the car manufacturers have tried the car export again in order to test the situation after the halt of the export since the beginning of the year.

Despite the delay of the export from Thailand to Vietnam since there is only one import auto examination center which performs the examination on every imported car, Thailand is still able to export its cars to Vietnam. Indonesia, one of the countries producing cars to export to Vietnam, has no problem with the car examination but is more concerned with the difficulties which come with the examination.     

Vietnam’s auto imports from Thailand-Indonesia 

Target Adjustment of MPI Expansion in Thailand