Bumi group defends open AP system, claims kept automotive industry ‘competitive’

Datuk Zainuddin Abd Rahman speaks to reporters outside Ilham Tower in  Kuala Lumpur July 10, 2018. ― Picture by Zuraneeza Zulkifli
Datuk Zainuddin Abd Rahman speaks to reporters outside Ilham Tower in Kuala Lumpur July 10, 2018. ― Picture by Zuraneeza Zulkifli

KUALA LUMPUR, July 10 — The Malaysian Association of Malay Vehicle Importers and Traders (or its Malay acronym Pekema) today defended the open Approved Permit (AP) system, claiming that it has helped kept the automotive industry competitive.

Its president Datuk Zainuddin Abd Rahman said the open AP system, awarded solely to Bumiputera companies of over two years’ business experience, was able to stop other importers from slapping on significantly bigger price tags on imported vehicles.

“They cannot simply increase the prices of imported cars as they wish because they need to remain competitive.

“In order to do so, the other importers must match the prices offered by AP holders,” he told reporters at Ilham Tower today.

Zainuddin said in a meeting with the Council of Eminent Persons (CEP) today, he expressed his concerns over rumours that the open AP system will be abolished by the Pakatan Harapan government.

He said the abolishment should not materialise as it would be against Article 153 of the Federal Constitution which pertains to the Special Position (SP) of the Malays and the Natives of Sabah and Sarawak.

“Tun Daim Zainuddin said many wished to see the system being abolished but I told him to take into considerations the money involved throughout the years. I myself have spent over RM20 million on my showroom and the land.

“It will not be easy for the government to do away with the system just like that. Why would they abolish a system that stays true to what’s dictated in the Federal Constitution? That’s unfair,” he said.

He also called on the government to waive the RM10,000 fee imposed on open AP holders as they had not received any returns promised by the previous government, although it has purportedly collected some RM2.7 billion from 2010 to 2017.

“There are about 800 types of AP in Malaysia and only an open AP is charged with a fee.

“It is easy to calculate. The government collects RM10,000 from 35,000 AP holders so it means they get RM350 million a year.

“The previous government promised that Pekema members would get 40 per cent out of the fee collection for business development purposes but it never came true,” he said.

He claimed that in a meeting with former International Trade and Industry Minister Datuk Seri Mustapa Mohamad, the latter had promised to distribute 40 per cent of the collection to Pekema members, 40 per cent to Bumiputeras who wish to join the industry and 20 per cent to the Malaysian Automotive Institute (MAI).

“Not even one per cent of Pekema members got it, new Bumiputera industry players got nil, and only MAI got their allocated 20 per cent,” he said.

According to the National Automotive Policy review in 2015, the open AP system should have been terminated by Dec 31, 2015 but Miti has since decided to maintain it with minor policy tweaks.

The objective of the new AP policy was to empower the Bumiputera economic agenda and to give Bumiputeras equal opportunities in the automotive sector, among others.

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