ASEAN's easing of vehicle test rules to mostly benefit Thai automakers

The Association of Southeast Asian Nations (ASEAN) will dispense with the testing for cars already tested and certified by the production country.

Known as the ASEAN Mutual Recognition Arrangement, the accord was reached by economic ministers at a Vietnam-chaired virtual meeting last month.

Automakers in Thailand and Indonesia have borne high certification costs to meet conformity assessment standards in both importing and exporting countries.

Under the agreement, automakers only need to pay one of the costs.

The certification process was also time-consuming, delaying the rollout of new vehicles by three to six months.

A spokesperson at Thailand-based Toyota Daihatsu Engineering and Manufacturing said they have high hopes that the agreement would help accelerate vehicle trade at the ASEAN as it would save time and costs incurred with recertification.

According to Auramon Supthaweethum, director-general of trade negotiations at the Thai commerce ministry, the certification process has also been used as a "non-tariff barrier" by importing countries such as what happened in January 2018 when Vietnam stepped up testing requirements leading to a halt in the trade from Thailand and Indonesia for several months.

The arrangement would prevent such schemes.

Auramon noted that it took 13 years for ASEAN to establish standards that are acceptable to all members.

The deal is expected to come into effect by the last quarter of this calendar year, after signing by trade ministers of member countries.

Thailand is the largest automaking country in the ASEAN.

Out of the 900,000 vehicles Toyota manufactured in the ASEAN region last year, 570,000 units were produced in Thailand.

Toyota exports half of the vehicles built in Thailand to other ASEAN members and Oceania.

Mitsubishi, Isuzu, Nissan, Ford, and MG also regard Thailand as their export hub thanks to a well-developed supply chain.

The ASEAN is also working on deals for other products such as building and construction materials.