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Truck manufacturers, assemblers at risk of closure

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The small scale of the truck market, the low localization ratio, low demand and high taxes and fees are putting pressure on truck enterprises.

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Under the Ministry of Transport’s regulation, since January 1, 2018, diesel engine vehicles have had to meet Euro 4 emission standards. 

Some manufacturers assembled and registered a high number of trucks with Euro 2 standards in 2017 to prepare for the sales in 2018. The manufacturers hope Euro 2 products will sell well as they are cheaper than Euro 4.

However, some enterprises have sold only several hundred products so far, while thousands of products remain unsold. As a result, they have to pay a lot for storage and maintenance.

Tien Phong estimated that the number of unsold trucks has reached tens of thousands of products. Some enterprises have to postpone their plans to launch new models into the market.

Analysts said the demand for trucks has decreased dramatically because of the policy to eliminate overloaded trucks from circulation. In addition, commercial banks have tightened lending to customers who want to buy trucks to provide transport services.

As a result, the sales of trucks have dropped sharply. Only small-size truck models with low price and reasonable quality can maintain stable sales as sellers run sale promotion programs to boost sales.

Under the new regulation, from April 2019, automobile manufacturers will have to have testing the length of 800 meters at minimum as stipulated in Decree 11.

This has caused concern among small assembling enterprises. To satisfy the requirement, they will have to rent new land plots to install a testing way, which will make the production cost higher.

According to the General Department of Customs (GDC), Vietnam imported 66,283 CBU cars of different types by the end of November, worth $1.5 billion. The Ministry of Transport (MOT) said that 7,226 cars had received certificates by mid-2018. 

Though imports have increased in recent months, the total number of imported cars had decreased by 20 percent by the end of November, while import turnover had decreased by 21 percent in comparison with the same period last year.

With the zero import tariff applied to ASEAN sourced imports, some automobile manufacturers in Vietnam have shifted to distributing imported cars instead of assembling.

Automobile manufacturers will also have to meet painting line meeting standards. To install the painting line, enterprises will have to spend at least VND100 billion.

The enterprises which are building a testing way and cannot fulfill the installation prior to April 2019 as stipulated in Decree 116 will have to make a commitment about deadlines.



Source: VietNamNet

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