Malaysia’s Malay Car Importers and Dealers Association (Pekema) has presented a five-point suggestion on the continuation of Open Approved Permit (AP) to the government for its consideration.
Its deputy president Datuk Wan Zaid Wan Abdullah said that although the government has helped in the matter indirectly, the fee charged was the main obstacle for the growth of the industry.
“Overall sales have dropped 60 per cent across the board because of these challenges. We need to restudy the levy imposed. Don’t see the abolishment of the levy as added advantage to Bumiputeras but it is to level the playing field,” he said at the Pekema Aidilfitri open house cum dinner here on Friday.
He cited as an example, the 30 per cent excise duty should not be imposed and hoped that this would get serious attention from the government.
“Our president will go to Japan next week to discuss the matter with the authorities there. We were told that they (Japan) don’t have any restriction, as long as the Malaysian government can agree with the Japanese on the matter.”
“The challenges faced in light of today’s economy, new rules, uncertain taxation system and levy payment should spur us to be more diligent in our business. I am proud that Pekema Sarawak and Sabah have taken the initiative to be strong and positive, and look at the challenges from a positive angle and tackle them together,” Wan Zaid said.
Meanwhile, Pekema will introduce a Verification System beginning Aug 1, which will give confidence to buyers who purchase vehicles from Pekema members.
The system will verify that what is supplied to the buyer is as stated and therefore will make Pekema members credible and trusted entrepreneurs.
He explained that the Open AP was introduced in the 1970s to enable Bumiputeras take up automotive business. At the early stage, there were over 400 members involved in car imports but only around 90 are left. This showed how tough the challenges they were facing in the automotive industry were.
Based on a 2015 study conducted by the Ministry of International Trade and Industry (MITI), the current Open AP system gives opportunities to the public to purchase used imported cars at a competitive price. They also found that the distribution and importation of used cars industry contributed significantly to the automotive industry and the country’s socio-economic development.
The AP system’s contributions to the supporting business and service sectors such as banking, insurance, shipping and logistics was estimated to be in the region of RM450 million per year. The government also collected about RM2 billion worth of taxes and fees per year, based on the current system. Furthermore, the study found that the AP system directly provided job opportunities to 3,800 high- and medium-income earners. Meanwhile, it’s said that the policy contributed to 5% out of the 36% Bumiputera equity in the automotive sector.
The Open Approved Permit (AP) policy for the import of used cars is set to remain in Malaysia until end 2016. A new set of improvements will be set in place from January 1, 2017 onwards.