Posted on 07 Sep 2015
The National Automotive Policy 2009 provided for the termination of open APs by Dec 31, 2015 and franchise APs by Dec 31, 2020.
The AP is a mechanism to control imported cars, and it is meant to protect national carmaker Perusahaan Otomobil Nasional Bhd (Proton) back then and to provide opportunities for bumiputra entrepreneurs in the automotive industry.
With only four months left to the deadline, will open APs be terminated?
The government has said that an in-depth study is to be undertaken to assess the impact of termination on bumiputra participation in the industry.
Malaysian Automotive Association president Datuk Aishah Ahmad said the government has consulted the association on the issue but stressed that the final call is up to the government.
"Doesn't look like as though they're going to remove it. They'll come up with an alternative suggestion on the AP, especially on the open AP, but they haven't advised us what it is. Have to wait for the government to come up with the final (road)map," she told SunBiz.
In July, it was reported that the government still retained the AP system for the import of used cars.
International Trade and Industry Minister Datuk Seri Mustapa Mohamed said the abolishment of the policy was still being studied as it was a rather complex exercise. "At the moment, the policy still applies. We have yet to resolve a few things," he was quoted as saying then.
HLIB Research analyst Daniel Wong said if the termination of the open AP does not happen, things will go on as usual. "The existing environment is already like that. If they're not going to do anything, things will go as they are now. Unless they (government) terminate it, (then) the other way of the story will play," Wong told SunBiz.
CIMB Research analyst Azman Hussin said whether the termination will happen depends on whether there is strong political will from the government.
"My opinion is that the government is in the right direction if they're moving towards abolishing open APs because the contribution to the Malaysian auto industry is negligible. They (open APs) are not contributing to technology transfer, so they should abolish it," Azman said.
