Saturday, 27 February 2021 | 03:02 WIB

Vietnamese Regulation May Cause Potential Loss of $85 Mln for Indonesia Car Exports

Illustration: Indonesia's car exports to Vietnam may have to be stopped (replacecarkey)

JAKARTA, NNC - Indonesia's car exports to Vietnam are threatened to stop following import regulations for passenger cars and knock-down cars by the country's government. Vietnam is a very promising automotive export market for Indonesia. The potential for lost export proceeds even reaches $85 million within a period of three months of the enactment of the regulation.

"The requirement set by Vietnam has the potential to make Indonesian passenger car exports to Vietnam threatened to cease. With the implementation of Decree 116, the lost export potential is predicted to reach USD85 million during the period of December 2017-March 2018," explained Director General of Foreign Trade at Ministry of Commerce, Friday (2/16/2018).

According to him, Vietnam set the terms of international standards for the roadworthiness of vehicles including emissions and safety. Meanwhile, Indonesia National Standard (SNI) that has been applied so far is deemed not adequate in accordance with the desired criteria.

"The provisions issued by Indonesia are actually very supportive and complete, are still considered to be unable to meet the standard of completeness requirements in Vietnam. Meanwhile, the certification by authority in Vietnam and Indonesia uses the same process and test equipment," he said.

Director of Trade Security at Commerce Ministry Pradnyawati said that the ministry will keep monitoring the development that happened after the import regulation was applied. The ministry will continue to establish communication with the Indonesian Embassy in Hanoi.

"We also hope that the negotiations that will be conducted by the Indonesian Delegation Team can open the barriers to access car market for Indonesian passenger cars to Vietnam," Pradnyawati said.

Based on data from Central Statistics Agency (BPS), Indonesia's passenger car export to Vietnam in January-November 2017 was recorded at $241.2 million. This value increased 1,256.5 percent (YOY) compared to 2016 which amounted to $17.782 million. Indonesia ranks third for countries exporting passenger cars to Vietnam after Thailand and China with 13.12 percent market share.