31 Aug 2012 Intellasia Finance Vietnam - Hong Kong Business ...

FINANCE
Vietnam finance & business 31 August 2012
Ministries make
businesses feel dizzy
with unstable
automobile policies
sumingly, business may grow beyond its management capacity, which had better be
sold before the occurrence of crisis. Also, owners would have no other choice but to
part with their businesses probably due to their own health problems, missing inheritors,
financial pressures or the need of investment capital for other businesses.
However, a number of deals over the recent time indicated that either local enterprises
could no longer withstand additional difficulties or foreign investors would assume
the present the convenient time for obtaining domestic established trademark at a bargain.
In the meantime, what concerns most is the underdeveloped trademark pricing services
and insufficient related legal corridor.
The M&A market has recently developed for the past four years and the number of capable
consulting firms is limited, said lawyer Truong Nhat Quang at YKVN's Law Department.
There have been merely 4-5 firms that could handle complicated deals so
far.
"Given the economic recession, selling domestic trademark to foreign investors could
be an option for local enterprises. It is high time to reposition the owners' roles to their
own businesses in the market economy and separation between governance and ownership
would be normal", said Thang.
31/AUG/2012 INTELLASIA | VIETNAMNET
The Ministry of Industry and Trade's idea to loosen the requirements enterprises must
have to be able to import cars has been facing the strong opposition from the enterprises-which
have spent much investment money to satisfy the requirements.
One year ago, the Ministry of Industry and Trade (MOIT) released the Circular 20 with
strict regulations, aiming to tighten the management over car imports.
The circular stipulates that car importers must show the procuration granted by the
automobile manufacturers themselves.
The legal document then dealt a strong blow on car dealers, who said that it was nearly
impossible to obtain such requirements from the automobile manufacturers, and that
car import companies would go bankrupt in masses because of the strict regulation.
However, MOIT still turned a deaf ear on the complaints, insisting on the necessity to
promulgate the legal document.
One year later, MOIT has changed its mind after realising that the strict regulations really
have weeded out a lot of car dealers from the market, thus making the market less
competitive. It has also been informed that the tax sums collected from automobile imports
have decreased dramatically, thus badly affecting the state budget income.
Therefore, MOIT is now considering loosening the strict requirements, and once again,
facing the strong opposition from the business sector.
In the past, when it insisted on setting up the strict regulations, it faced the protest from
small car dealers, who cannot satisfy the requirements. And now, when attempting to
loosen the requirements, it is facing the opposition from the enterprises which have
made heavy investment to expand the distribution networks.
Dang Phan Thu Huong, deputy general director of Toyota Vietnam, said on Dau tu
that in any cases, MOIT and relevant ministries need to follow consistently the purpose
set up when issuing the Circular No. 20.
The decision by MOIT has been advocated by Toyota Vietnam and other members of
the Vietnam Automobile Manufacturers' Association (VAMA), which believe that it's
necessary to stimulate healthy trade to protect the rights and legitimate benefits of consumers.
Meanwhile, Tran Ba Duong, President and CEO of Thaco Group, has warned that if
the watchdog agency removes the requirement on procurations to be granted by automobile
manufacturers themselves, this would pave the way for car dealers to import
distort the market and create unhealthy competition.
Regarding the sharp falls of the tax collection, Duong said this should be blamed on
the current economic difficulties rather than the car imports decreases.
Duong also thinks that Hanoi and HCM City are imposing overly high automobile
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