Honda, Toyota Suspend Vehicle Shipments to Vietnam

Honda, Mitsubishi and Toyota have stopped shipping vehicles to Vietnam because of new inspection rules for imported cars, The Nikkei reports.

The regulations, which are considered protectionist by critics, were announced last October and took effect this month. The new protocols began just as Vietnam lifted its 30% tariff on foreign-made vehicles from other members of the Assn. of Southeast Asian Nations.

The decree requires emission and safety inspections for each batch of vehicles arriving from within the ASEAN region. Before the decree, importers could use a single set of inspections to qualify an entire model year’s worth of vehicles. Japan’s Chamber of Commerce says each emission test can take as long as two months and cost $10,000.

Carmakers had expected a surge in import sales in Vietnam when tariffs were lifted. Toyota, which locally produces 80% of the vehicles it sells in the country, says the new rules prompted it to halt imported models. The policy affects Hilux pickup trucks, Fortuner SUVs, luxury Lexus vehicles and Yaris subcompact cars made in Indonesia, Japan and Thailand.

Similarly, Honda had been shipping components for its popular CR-V small crossover vehicles from Japan for final assembly in Vietnam to avoid the previous 30% tariff. The company hoped to lower costs by consolidating the assembly work in Thailand ahead of the end of the tax. Now it has opted to halt imports entirely, according to The Nikkei.

Mitsubishi Motors also has suspended Thai-made Pajero SUV shipments to Vietnam. Ford, which has been supplying the market from Thailand, complains the decree has a “significant” impact on its ability to do business in the country.