PEKEMA Welcomes Open APs, But Wants Stringent Selection

PEKEMA welcomes MITI’s plan to open up eligibility for open APs to any bumiputera company but wants stringent selection criteria.

The Malay Vehicle Importers and Traders Association of Malaysia (PEKEMA) has welcomed the government’s initiative to open up the eligibility for open approved permits (APs) to any bumiputera company. This comes as a response to the initiative mooted by the Ministry of Investment, Trade, and Industry (MITI) to allow a more transparent and open process for obtaining these APs.

While the association is open to this initiative, PEKEMA insisted that the government and its related agencies should implement some stringent selection criteria as well as tight control over the total number of companies. These measures are required in order to ensure that the applied companies are truly capable in both financial and experience, while the tight control of the AP allocation will help to prevent overcrowding issues.

PEKEMA President Datuk Haji Mohamed Nazari Noordin (left)

“The total number of open AP companies has to be carefully controlled to ensure that the automotive industry remains competitive. This is important to avoid a glut of companies that might not be competitive in the market,” said PEKEMA president Datuk Hj. Mohamed Nazari Bin Noordin in the association’s official statement.

“Stringent selection has to be done to ensure only the companies that can positively contribute to the automotive industry are given the chance, with emphasis on quality and not quantity,” he added.

The association fears that companies with a lack of experience and financial backing might suffer big losses if they were given APs, as the ‘recon’ car market has a high depreciation rate. The PEKEMA boss ended his statement by suggesting that the government should undergo more studies before implementing this initiative.

In case you missed it, MITI announced that from July 1, 2024, onwards, any bumiputera-owned company can apply to be appointed as an open AP company, which allows them to engage in vehicle importation and sales activities in Malaysia. The ministry added that this move is in line with its efforts to be more open and transparent in the open AP application process.

As for the current requirements, MITI stipulates that any bumiputera company that wants to secure open APs must be 100% owned by bumiputera, be in the business for at least two years while having a ‘Sdn Bhd’ status in their company registration, as well as have a minimum paid-up capital of RM1 million.