A year of many changes: Many car models stopped selling in Vietnam, beautiful license plates are suddenly ‘talking about’

The end of the year is a time to look back on a turbulent year in the Vietnamese auto market with new developments.

Abolishing regulations on calculating the localization rate of cars, stopping many car models from being sold in the Vietnamese market, piloting the auction of car license plates and proposing to abolish mandatory insurance for motorbikes is probably one of the reasons. Outstanding events in the Vietnamese automobile market in 2022.

Abolish regulations on calculating automobile localization rates

Specifically, Circular 11/2022/TT-BKHCN, effective from October 1, 2022, abolishes all 3 following legal documents:

Firstly, Decision No. 28/2004/QD-BKHCN dated October 1, 2004 of the Minister of Science and Technology on the method of determining the localization rate for cars.

Second, Decision No. 05/2005/QD-BKHCN dated May 11, 2005 of the Minister of Science and Technology on amending and supplementing Decision No. 28/2004/QD-BKHCN dated October 1/ 2004 of the Minister of Science and Technology on methods for determining the localization rate for automobiles.

Third, Circular No. 05/2012/TT-BKHCN dated March 12, 2012 of the Minister of Science and Technology on amending and supplementing Article 1 of Decision No. 05/2005/QD-BKHCN dated March 11 05/2005 of the Minister of Science and Technology on amending and supplementing Decision No. 28/2004/QD-BKHCN dated October 1, 2004 on the method of determining the localization rate for cars.

Thus, after nearly 20 years, regulations related to the localization rate and discrete level of imported auto components promulgated by this Ministry are officially abolished. Because the above regulations are no longer consistent with the practical development of automobile manufacturing technology.

Many car models have been “discontinued” in Vietnam

In 2022, many domestic car manufacturers must announce to stop selling some car models for many reasons such as: low sales, lack of supply, and not meeting Euro 5 emission standards.

Typically, three Toyota car models, Rush, Wigo and Hilux, have all been discontinued and stopped being sold from the beginning of 2022. According to CafeAuto To find out, the case of Toyota Rush is about changing the company’s strategy. As for Toyota Hilux and Wigo, distribution was discontinued due to Euro 5 emissions standards. However, there is also information that these models will also return next year with a new upgraded version. more about performance.

And yet, a similar incident happened with a Vietnamese car company. At the end of July 2022, VinFast surprised domestic consumers by officially announcing the cessation of sales for 3 car models. Its gasoline products are Lux A2.0, Lux SA2.0 and Fadil, with the reason of focusing on the production of electric vehicles.

Accordingly, in the near future, VinFast will launch a series of new electric car products: VF 5, VF 6, VF 7, VF 8, VF 9, filling the ABCDE segments.

Similar to Wigo, Honda’s cheapest small car model in Vietnam, Brio, could not escape due to the engine not meeting the latest emissions standards.

Next, Ford Vietnam announced to stop distributing EcoSport cars at the end of February 2022. A Ford representative once shared that the Ford Group’s restructuring in the Indian market from 2021 will lead to changes in vehicle and component factories there, which will affect some vehicle models. , including EcoSport rolling in Vietnam.

In the same situation, due to difficulties in supplying components, TC Motor also stopped assembling and distributing the Kona car model. There is also no information about whether the company will reopen sales of this model.

Pilot auction of car license plates

On November 15, the National Assembly passed a Resolution on piloting car license plate auctions. This Resolution takes effect from July 1, 2023 and will be implemented for 3 years.

According to the resolution passed by the National Assembly, car license plates put up for auction are license plates with a white background and black letters and numbers (except for license plates issued to cars of economic military enterprises, project cars, joint venture economic organizations with foreign countries, cars of foreign organizations and businesses, diplomatic representative agencies, consular representatives… operating in the territory of Vietnam).

The resolution stipulates that the starting price of a car license plate put up for auction is 40 million VND, the deposit is equal to the starting price of a car license plate put up for auction with a price step of 5 million VND.

The money collected from the auction of car license plates after deducting the costs of organizing the auction is paid to the Central budget. The management and use of money collected from license plate auctions will be specifically regulated by the Government.

In case at the end of the time limit there is only one person registering to participate in the auction or there are many people registering to participate in the auction but only one person participates in the auction, the license plate of the car up for auction will be transferred to that person.

The person who wins the car license plate auction is allowed to keep the auctioned car license plate in case the car is lost, damaged and cannot be used or is transferred, exchanged or given away to register another vehicle under the ownership. ownership, will be re-issued the license plate of the winning vehicle, and a document certifying the license plate if it is lost, blurred, or damaged.

But the auction winner is not allowed to transfer, exchange, donate, or inherit the license plate of the winning auctioned vehicle, except in the case of transferring, exchanging, donating, or inheriting the vehicle with the winning auctioned license plate.

Proposal to abolish mandatory insurance for motorbikes

Recently, one of the other notable contents of the Vietnamese automobile industry in 2022 is the proposal to abolish mandatory insurance for motorbikes. Accordingly, the Vietnam Confederation of Commerce and Industry (VCCI) believes that the implementation of mandatory insurance has been proven to bring many social benefits, but with civil liability insurance for motorbike owners. no.

After more than 10 years of implementing Decree 103/2008/ND-CP, the rate of compulsory insurance payments for civil liability for motorbikes is still very low, nearly 6% in 2019 (45 billion VND paid over 765 million VND). billion VND in insurance premiums). This rate is much lower than other types of compulsory insurance, specifically, the payout rate of car civil liability insurance is about 33%, fire and explosion insurance is 31%.

VCCI believes that compared to other compensation measures, insurance has the advantage of paying faster to accident victims and reducing financial pressure on those who must compensate, thereby creating surplus value. higher for the same compensation amount.

However, with a limited payment amount of about 45 billion VND, it is difficult to convince that the benefits from the motorbike owner’s civil liability insurance compensation are greater than the social costs to be foregone. The output is 765 billion VND. Thus, in terms of total benefits for society, compulsory insurance for motorbikes does not ensure the principle that benefits outweigh costs.

Therefore, VCCI requested the drafting agency to consider narrowing the scope of subjects required to purchase motor vehicle liability insurance, in the direction of excluding motorbikes.

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