Vietnam curbs imports of motorcycle parts
HANOI - Vietnam's Deputy Prime Minister Vu Khoan said a recent
import curb on motorcycle parts was taken to reduce the nation's
traffic accident death toll, but he also acknowledged the measure
would hurt local affiliates of Japanese manufacturers.
"There are too many motorcycles on the road. The death toll from
traffic accidents involving motorcycles last year was about 70,000.
The government is responsible for protecting people's lives and had
no choice but to install an import curb as an emergency measure,"
Khoan said at a recent press conference in Hanoi.
On Sept. 4, the Vietnamese government decided to restrict the total
imports of motorcycle parts and components to 1.5 million units
this year, applied retroactively from January.
The import curb -- which is considered by the foreign manufacturers
as a ploy to bolster domestic motorcycle makers -- has forced local
affiliates of Japanese motorcycle manufacturers, including Honda
Motor Co., to suspend production.
Khoan is scheduled to accompany Nong Duc Manh, secretary general of
the country's ruling Communist Party, in his first visit to Japan,
starting on Wednesday. During the visit, Khoan is scheduled to hold
talks with Japanese economic ministers.
"I will explain (the import restriction) to the Japanese officials
to win their understanding," Khoan said.
"I am aware of confusion being felt on the part of local affiliates
of foreign motorcycle makers (operating in Vietnam)," he said,
adding that he has instructed related ministries to devise other
road-safety measures, including the introduction of a public
transportation system.
With regard to Japan-Vietnam relations, Khoan said that not only
has progress been made in the fields of politics, economy, trade
and manpower development but ties are also deepening within the
multilateral framework, including that of the Association of
Southeast Asian Nations-plus-3--namely Japan, South Korea and
China.
Khoan added: "Vietnam considers Japan one of its most important
partners. Secretary General Manh's visit to Japan is historically
significant in further enhancing the relationship between Vietnam
and Japan, which will celebrate the 30th anniversary of the
establishment of diplomatic ties next year."
Khoan went on to say that Manh "will express his vow to further
promote the 'doi moi' (market-oriented reform) policy" during his
visit to Japan.
Japan is now the largest importer of Vietnamese products, including
textiles and crude oil.
Following Prime Minister Junichiro Koizumi's visit to Vietnam in
April, the Japan-Vietnam relationship have progressed smoothly.
On the other hand, the Japanese government, in light of its fiscal
plight, is planning to cut official development assistance to
developing countries, including Vietnam.
"Vietnam is utilizing Japan's ODA effectively, not only in
upgrading its social infrastructure, such as improvement of roads
and the water supply system, but also in such areas as human
resource development," Khoan said, urging Japan not to reduce its
ODA to Vietnam.
Khoan, a long-serving vice foreign minister, was appointed as a
trade minister last year and contributed to the successful
establishment of a trade accord with the United States. His
contribution was highly regarded and he was appointed deputy prime
minister in July this year.
By Kenichi Okumura - The Yomiuri Shimbun - October 1st, 2002.
Honda Vietnam's difficulties will be satisfactirily solved
HANOI - Difficulties currently faced by Honda Vietnam will be
considered and satisfactorily solved.
The pledge was made at a meeting in Ha Noi on Monday between Honda
Vietnam and representatives from the Ministries of Industry, Trade,
Finance, and Planning and Investment.
Deputy Minister of Planning and Investment Tran Dinh Khien said
relevant agencies would base themselves on the permit, feasibility
study, and actual capacity of the company as well as its
localisation commitment and market demands to decide whether or not
to increase Honda Vietnam's component import quota. The assembler's
plan to increase its capacity will also be considered if it imports
new technology.
Deputy Minister Khien said the Vietnamese Government has asked
foreign-invested motorbike producers and assemblers to strictly
observe commitments and obligations contained in their investment
licences as well as to abide by Viet Nam's legal regulations.
Relevant agencies will hold working sessions with foreign investors
to work out a solution to their current shortage of imported
motorbike parts for assembly. The Vietnamese Government has
strictly exercised the Law on Foreign Investment and provisions
included in investment licences given to businesses, the Deputy
Minister added.
Honda Vietnam has suspended the assembly of motorbikes as it has
run out of motorbike import quotas since Sept. 14. The incident
occurred because of an error committed by the provincial Trade
Department of Vinh Phuc, which is authorised to issue investment
licences in the province, as well as the company's lack of legal
understanding and failure to follow through on its commitments.
According to Bui Doan Nguyen, Honda Vietnam deputy general
director, the company began marketing its Wave Alphas early this
year. With the product selling well in the domestic market, Honda
Vietnam asked the Vinh Phuc provincial Trade Department for
permission to import 587,000 sets of Honda motorbike components.
The proposal was then approved by the provincial authorities.
However, the Trade Ministry announced in the third quarter that the
company was to be allocated a quota to import only 280,000 sets of
motorbike components this year. Upon receiving the Trade Ministry
announcement, Honda Vietnam had almost finished the assembly of its
2002 import quota.
Also at the meeting, Ngo Anh Dung, director of the foreign
investment department of the Trade Ministry, said the permit given
to Honda Vietnam by the Vinh Phuc provincial Trade Department was
not proper. Upon having learnt about the incident, the Trade
Ministry asked Vinh Phuc province to withdraw its permit granted to
Honda Vietnam.
Pursuant to effective regulations, the approval of import quotas
for foreign-invested enterprises by relevant agencies must be based
on their respective investment licences and feasibility studies. In
case a business wishes to expand its production capacity, it must
submit its development plan to relevant agencies for approval. The
relevant agency for Honda Vietnam in this case is the Ministry of
Planning and Investment or its authorised agency, Dung noted. If a
business wishes to increase its capital, it must disburse all of
its originally registered capital, the official added.
He noted that according to the investment licence granted to Honda
Vietnam, the company is allowed to assemble 450,000 motorbikes a
year. However, the company has so far disbursed only two-thirds of
its committed capital. Therefore, its current assembly capacity
must be lower than the registered capacity of 450,000 motorbikes a
year.
The official went on to say that the Trade Ministry will give
severe punishment to the Vinh Phuc provincial Trade Department for
its improper issue of the permit.
According to Dung, the Trade Ministry has approved the import quota
of 1.5 million motorbikes for this year. The quota has been divided
to seven foreign-invested and about 50 domestic assemblers. The
allocation of the quota to assemblers has been made on the basis of
last year's productivity and registered capacity of businesses,
market demands as well as infrastructure conditions of the country.
Based on those criteria, seven foreign-invested assemblers have
been allowed to import 600,000 sets of motorbike components. The
quota given to Honda Vietnam was 280,000 sets or almost half of the
total volume for the foreign-invested sector.
Quotas for other foreign-invested assemblers, including VMEP,
180,000 sets; GMN, 20,000 sets; and Lifan Vietnam, 5,000 sets, were
all much lower than their registered capacity.
The official, however, admitted that his ministry's quota
imposition was only a temporary solution exercised to reduce
traffic accidents and ensure social security.
The import tax on motorbikes will be increased to 100 percent as of
Jan. 1, 2003 from the present 60 percent. The Ministry of Finance
said the move aims to ensure that the import of complete motorbikes
will not affect the operations of local assemblers when the
Government officially abolishes restrictions on the import of fully
assembled motorbike import from 2003. At present, motorbike import
needs licences from the Ministry of Trade.
Vietnam News Agency - October 1st, 2002
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