Decision No. 115/2004/QD-BCN dated October 27, 2004 of the Ministry of Industry promulgating the Regulation on criteria of automobile-manufacturing and/or -assembling enterprises

DECISION

PROMULGATING THE REGULATION ON CRITERIA OF AUTOMOBILE-MANUFACTURING AND/OR -ASSEMBLING ENTERPRISES

THE MINISTER OF INDUSTRY

Pursuant to the Government's Decree No. 55/2003/ND-CP of May 28, 2003 on the functions, tasks, powers and organizational structure of the Ministry of Industry;

Pursuant to the Prime Minister's Decision No. 175/2002/QD-TTg of December 3, 2002 approving the Strategy on development of Vietnam's automobile industry till 2010, with a vision towards 2020;

Pursuant to the Prime Minister's Decision No. 177/2004/QD-TTg of October 5, 2004 approving the Planning on development of Vietnam's automobile industry till 2010, with a vision towards 2020;

In order to make investment in the manufacture and assembly of automobile in strict accordance with the development planning and with efficiency; and to ensure the products' quality and market competitiveness;

At the proposal of the director of the Science and Technology Department,

DECIDES:

Article 1.- To issue together with this Decision the Regulation on criteria of automobile-manufacturing and/or -assembling enterprises.

Article 2.- This Decision takes effect 15 days after its publication in the Official Gazette.

Article 3.- The Director of the Office, the Chief Inspector, the directors and heads of departments and units of the Ministry, the presidents of the provincial/municipal People’s Committees and the concerned organizations and individuals shall have to organize the implementation of this Decision.

REGULATION

ON CRITERIA OF AUTOMOBILE-MANUFACTURING AND/OR -ASSEMBLING ENTERPRISES

(Issued together with the Industry Minister's Decision No. 115/2004/QD-BCN of October 27, 2004)

Chapter I

GENERAL PROVISIONS

Article 1.- Scope and subjects of application

This document prescribes the criteria of enterprises of all economic sectors, which are set up under law provisions and engaged in the manufacture and/or assembly of cars, passenger cars and trucks, except for foreign-invested enterprises, which have been granted investment licenses before the effective date of this Regulation.

Article 2.- Interpretation of terms and phrases

In this document, the following terms and phrases shall be construed as follows:

1. Cars, passenger cars and trucks mean automobile prescribed under Vietnamese standards TCVN 7271: 2003 and TCVN 6211:2003.

2. Automobile assembly means the process of assembling details, detail assemblies and parts into complete automobiles.

3. Component assembly means the assembly of details into complete detail assemblies such as engines, gearboxes, chassis, cases, driver's cabs, passenger compartments, cargo trunks.

4. Automobile chassis means the system of pressure-bearing structures to be assembled with engines, driver's cabs, cargo trunks, passenger compartments, steering systems, wheel assemblies, transmission systems and other parts of automobiles.

5. Automobiles' body means the whole chassis, case and floor of automobiles.

Chapter II

CRITERIA OF AUTOMOBILE-MANUFACTURING AND/OR -ASSEMBLING ENTERPRISES

Article 3.- General criteria

Automobile-manufacturing and/or -assembling enterprises must meet the following conditions:

1. Having their feasibility study reports appraised and approved according to the State's current regulations on construction and investment management; having the assembly capacity (for one production shift) of at least 3,000 passenger cars/year; 5,000 trucks of a tonnage of up to 5 tons /year; 3,000 trucks of a tonnage of between 5 and 10 tons/year; 1,000 trucks of a tonnage of over 10 tons/year; and 10,000 cars /year.

2. Having adequate production space and workshops for arrangement of technological chains for manufacture, assembly and testing; having designing, technology and quality-testing sections, detail-preserving stores, production-administration areas, waste-treating works, storing-yards, test-runs and other supporting works. Workshops must be built in conformity with plannings on local industrial development on land plots under enterprises' lawful use right or with lease contracts of a duration of at least 20 years.

3. Having adequate designing dossiers for each category of automobiles to be manufactured and/or assembled, which have been appraised and approved by competent agencies according to current regulations; not violating industrial property rights and having license contracts on technology transfer from original manufacturers regarding the following objects: products' designs, trademarks, technological know-how, documentary information and training.

4. Having manufacture and/or assembly workshops, covering areas for welding, painting and testing, arranged according to appropriate technological process. Charts on the overall technological process and each manufacture or assembly stage must be arranged right at prescribed places in the workshops for workers to comply with. The workshops' floors must be covered with anti-slippery paint and marked with line to demarcate safe aisles and working grounds.

5. Having adequate equipment and facilities to ensure industrial sanitation and labor safety, reduce hazards (noise, heat, dust), prevent and fight fires and explosions and treat wastes (solid, liquid and gaseous) in strict accordance with current regulations; to ensure landscape, environment and industrial civilization.

6. Having separate test-runs at least 500 m long, which satisfy technical requirements, so as to test the quality of to-be-delivered assembled automobiles when running on flat, gravel, bumpy, submerged, slope, turning and slippery roads.

Article 4.- Technological chains for assembly

1. Chains for assembling automobiles' chassis and bodies must be equipped at least with the following main devices:

a/ Vertical spot welders, hanging spot welders, seam welders, Mig welders, Tig welders, together with welding equipment and special-use fixtures;

b/ Compressed air riveting equipment;

c/ Hydraulic lift, special-use pushcarts and systems of guide rails for pushcarts;

d/ Welding fixtures for assembling left sides, right sides, roofs, floors, tails, chassis and case assemblies for cars; fixtures for welding and assembling spars and beams of passenger cars' and trucks' chassis;

e/ Iron-sheet stretching equipment for passenger cars;

f/ Fixtures for assembling cargo trunks into trucks' bodies;

g/ Fixtures exclusively used for assembling case pieces and assemblies into chassis;

h/ Attached auxiliary and repair equipment and devices.

2. Technological chains for general assembly and automobile assembly include: assembly of components, understructure systems, rear wheel-drive, front wheel-drive and engines into chassis and assembly of main control assemblies, interior equipments and system of doors and side doors into automobiles' bodies…

Besides, assembly chains shall be equipped with supporting devices such as compressed air supply system, special-use pushcarts, compressed air bolt and screw drivers; fixtures for assembling engines into chassis; special-use fixtures for assembling understructure systems (with lifting equipment for cars and light trucks); trestle works for assembling understructure systems of passenger cars and trucks; tire fixers; special-use dynamic balancing machines, etc.

3. The quantity, categories and technical specifications of equipment, devices, tools and fixtures for assembly chains must be compatible with the categories of products and output already approved in the projects' feasibility study reports.

Article 5.- Painting technological chains

1. Depending on the requirements of each type of automobiles to be assembled, enterprises shall have to equip suitable automatic or semi-automatic painting chains, covering the following main steps:

a/ Cleaning by high-pressure water;

b/ Degreasing and surface treatment;

c/ Acid- and mineral-removing tanks and regulating tanks

d/ Phosphating;

e/ Electrolytic immersion-painting tanks, painting rooms (electrostatic paint-spraying or pressure paint-spraying), drying rooms;

f/ Injecting PVC into welding joints and plastic colloid into understructure of automobiles' bodies for waterproofing;

g/ Decoration painting, gloss painting of outermost coat and wax covering for paint protection.

2. Technical requirements on painting technology:

a/ For cars (of up to 9 seats): The inner coats of bodies must be painted by electrolytic immersion-painting technology while the outer coats may be painted by electrostatic or pressure paint-spraying.

b/ For passenger cars: Chassis and cases of cars of up of 15 seats must be painted like cars' bodies; chassis and cases of cars of 16 seats or over may be painted by electrostatic or pressure paint-spraying for the first 2 production years. After that period, enterprises must apply the painting technology of electrostatic paint-spraying.

c/ For trucks: Chassis of assorted trucks and cases of trucks of a tonnage of up to 3.5 tons must be painted like cars' bodies. Cases of trucks of a tonnage of over 3.5 tons may be painted by electrostatic paint-spraying or pressure paint-spraying for the first 2 production years. After that period, enterprises must apply the painting technology of electrostatic paint-spraying.

Enterprises must fully equip devices for testing the quality of painting coats such as thickness, brightness and surface adheresiveness.

Automobile-manufacturing and/or -assembling enterprises may cooperate with others to make investment in advanced painting technology for ex-factory automobiles to reach technical requirements mentioned in Clause 2 of this Article.

Article 6.- Technological chain for checking assembly quality

Automobile-assembling chains must be equipped with special-use testing devices for each assembly stage and equipment in order to test ex-factory norms according to current regulations, including safety norms and exhaust concentration. The testing of ex-factory norms must be carried out for 100% of assembled automobiles. Testing results must be processed and archived on computer system.

Before their delivery, assembled automobiles must be put on test runs according to testing process set by manufacturing establishments.

The inspection of adjustment of testing devices must be carried out according to the State’s current regulations.

Article 7.- Implementation of the program on production development

Enterprises shall, basing themselves on the Industry Ministry's direction for the implementation of the Program and solutions to develop automobile manufacture till 2010, have to formulate and implement their programs and measures for the development of automobile manufacture according to the schemes already approved by competent authorities, in compatibility with the strategy and planning on the development of automobile industry till 2010, with a vision towards 2020, already approve by the Prime Minister.

Article 8.- Organization and management of enterprises

Automobile-manufacturing and/or -assembling enterprises must also meet the following conditions:

1. Having sections for designing and technological research as well as product-quality inspection; having adequate staff to receive the transfer of advanced technologies, and research and improve products; having full dossiers on design, technology and quality standards related to each category of products;

2. Having strategies on production and business development, programs and plans on human resource development as well as on cooperation with specialists and training of technical officials and workers;

3. Being granted the certificate of application of quality management system under ISO 9001:2000 or one of other advanced quality management systems to their production and business activities (TQM, QS 9000) within 24 months as from the date of commencement of automobile manufacture and/or assembly and certificate of application of environmental management system ISO 14001 within 36 months;

4. Having the networks of sale, warranty, maintenance and post-sale service agents.

Chapter III

IMPLEMENTATION ORGANIZATION

Article 9.- Implementation steps

1. For new projects, investors shall base themselves on the criteria in this Regulation to elaborate dossiers on investment projects for submission to competent authorities for approval, and implement such projects after they are approved.

2. The provincial/municipal Industry Services shall assume the prime responsibility for, and coordinate with provincial/municipal functional agencies in, appraising dossiers and making field inspection, then proposing the provincial/municipal People's Committees to consider and certify enterprises' qualification for automobile manufacture and assembly as prescribed in this document before the plants are officially put into operation.

3. Enterprises which have been licensed by competent authorities for investment in automobile manufacture and/or assembly before the effective date of this documents shall have to complete additional investment before July 1, 2005 and submit dossiers thereon to the provincial/municipal People's Committees for the latter to consider and certify their satisfaction of criteria of automobile-manufacturing and/or -assembling enterprises as prescribed in this Decision.

Article 10.- Reporting regimes

1. Enterprises shall have to make biannual and annual reports on their investment, production and business results to the provincial/municipal People's Committees; to bear responsibility before law for, and submit to the inspection and supervision by concerned State management agencies of their automobile import-export, manufacture, assembly and trading activities.

2. The provincial/municipal Industry Services shall have to synthesize the investment, production and business situation of automobile-manufacturing and/or -assembling enterprises in their respective localities and annually report such to the Ministry of Industry before December 15 for monitoring, management and reporting to the Prime Minister.

Article 11.- Inspection of the implementation of the Regulation

The Department for Science and Technology shall assume the prime responsibility for, and coordinate with functional agencies and concerned agencies and units in, organizing the inspection of the implementation of this Regulation.