Industry players remain split on AP issue PETALING JAYA: Uncertainty continues to surround the issue of the Approved Permit (AP) policy as automotive industry observers are divided on whether it should be maintained or abolished. “The abolition of APs would promote a free-trade system as it would mean anyone would be able to import vehicles,” said a local used car trader who chose to remain anonymous. Federation of Motor and Credit Companies Association of Malaysia president Datuk Tony Khor, however, believes that maintaining the AP system will not affect the business of local players. “The APs are mainly used to import luxury vehicles into the country, so even if they were maintained, it will not affect players distributing national makes such as Proton and Perodua.” The Proton Edar Dealers Association Malaysia, meanwhile, believes that APs should not be abolished, but instead “tweaked” to allow completely-knocked-down (CKD) players to grow their market share. “The Malaysia market is not growing substantially enough to maintain the influx of imported cars. “The number of car buyers that are eligible to obtain loans is also shrinking with tighter lending rules,” said its president Armin Baniaz Pahamin. Abolishing APs, Armin added, would affect the economy, employment rate and have an adverse impact on the local automotive industry. Earlier this week, International Trade and Industry Minister Datuk Seri Mustapa Mohamed said the Government was still studying a proposal to abolish the AP policy for the import of vehicles. He said abolishing APs would create an impact on employment and Government revenue, noting that the Malaysian Government had collected about RM1bil from the issuance of APs over the past three years. APs can be categorised as open APs (which allows the holder to import any car brand from any country) and franchise APs (which allows holders to import specific brands and makes from its principal), and has long been a contentious subject and a target of constant criticisms. Introduced in 1970, the objective of the AP system was to promote and provide opportunities for bumiputra entrepreneurs in the automotive sector. Under the National Automotive Policy (NAP) that was announced in October 2009, open APs were supposed to will be scrapped by Dec 31, 2015, while franchise APs will be terminated by Dec 31, 2020. Under the first NAP in 2006, the AP system was supposed to be abolished by 2010. During the announcement of the NAP 2014 in January, Mustapa said an in-depth study would be done to assess the impact of its proposed termination. AmResearch said it expected uncertainty on whether APs would be abolished. “We see no impact from the development as there had always been uncertainty on execution of the AP abolishment.” An industry observer concurred: “I don’t think it will be abolished, at least not any time soon.”
Posted on: Sat, 12 Jul 2014 01:50:22 +0000