It was reported on Monday that the rule, coming into effect on June 26, applies to new cars of less than nine seats.

Importers must submit to the authorities documents showing that they have been authorized by foreign auto companies to sell the cars in Vietnam. The documents have to be verified by Vietnamese diplomatic representatives.

In addition, importers need to have qualified customer service facilities in Vietnam before being allowed to bring foreign cars into the country, according to the new rule.

The reporter cited a customs officer as saying that the regulation was a trade barrier that aimed to help reduce Vietnam’s trade deficit. “Unauthorized car dealers will find it difficult providing the required documents,” he said.

Pham Huu Tam, director of car trader Tradoco, said there are 11 auto joint-ventures in Vietnam, and they are the only ones that have the required authorization documents. Small importers will have to shut down their business unless they become sales agents for the joint-ventures, he said.

An unnamed car dealer said the new rule is a tricky one for importers because it means the entire car market is being handed over to members of the Vietnam Automobile Manufacturers’ Association (VAMA).

Vietnam imported 10,956 cars worth nearly US$190 million between January and April this year. Of these, cars of less than nine seats accounted for 7,000 units.

During the same period, 37,305 cars assembled by VAMA members were sold nationwide.