The Ministry of International Trade and Industry (MITI) has actually implemented the new Open AP (Approved Permit) Policy since the start of the year, after a delay of two years due to uncertainties in the Malaysian automotive landscape.
In a statement by MITI, the objectives of the new policy - which permits qualified Bumiputera companies to import reconditioned vehicles - includes promoting the development of new Bumiputera entrepreneurs in the automotive industry and contribute back to socio-economic goals.
File photo from Facebook page of MITI
MITI also hopes the new policy will create a competitive market that will benefit the consumers especially in terms of the prices and services.
Under the new policy, there is no limit to the overall number of APs to be released throughout the year and companies may apply for additional APs based on their sales performance.
Data from MITI also details that there has been a rise in the issuance of Open APs for passenger vehicles- 21,947 in 2017 increasing to 28,316 in 2018.
Back in 2016, MITI received nearly 300 applications for the formation of an Open AP company. Only 164 companies (128 existing and 36 new) made the cut, which included an audit by a qualified independent auditor.
The conditions required, apart from the obvious 100% Bumiputera ownership and key management posts, include a strong financial position and a minimum of two years experience in sales and distribution of motor vehicles. A showroom with office space and a display area is also amongst the requirement by MITI.
Age of the imported vehicle is also a criterion that is set by MITI, where reconditioned vehicles aged only between one to five years from its first date of registration at its country of origin are allowed for sales. Open AP companies are also required to provide a warranty coverage for a minimum of one year to buyers.
MITI said they will continuously monitor and audit these Open AP companies and will take drastic measures that include suspension of AP allotment as well as blacklisting of companies who breach any of the conditions.
Last year, MITI blacklisted nine companies that failed to meet the stipulated conditions.