Bumiputera firms without auto experience can apply for Open APs from July 1

Updated policy aimed at encouraging greater participation from Bumiputera companies in vehicle importation and sales

1:56 PM MYT

 

KUALA LUMPUR – Any Bumiputera company, including companies that have never been involved in automotive activities, can apply to be appointed as an Open AP company to engage in vehicle importation and sales activities in Malaysia, effective July 1.

The Investment, Trade and Industry Ministry (Miti) said the move is in line with Miti’s efforts to continue to increase inclusiveness and transparency in the Open AP application process.

“The implementation of this policy is expected to attract more Bumiputera companies to engage in the automotive industry. The increase in the number of companies will make this segment more competitive,” the ministry said, as reported by Bernama.

For Bumiputera companies that are interested, Miti said the main conditions are “sendirian berhad” status, 100% Bumiputera ownership, a minimum paid-up capital of RM1 million and being in operation for at least two years.

Therefore, Miti invites interested and eligible Bumiputera companies to apply with the guidelines, application form and checklist, which can be found on the ministry’s website.

Miti added that the government’s main objective is to continue empowering the Bumiputera socio-economic agenda by giving more competitive Bumiputera entrepreneurs the opportunity to be involved in the automotive sector.

According to the ministry, the Open AP policy implemented since 1970 has successfully produced viable Bumiputera companies, not only in the segment of importing and selling vehicles but also in key activities along the supply chain such as after-sales service, insurance and logistics . 

The policy is one of the policies related to Bumiputera that has been maintained until now and is important to achieve the target of 30% ownership of Bumiputera equity in the national economy as outlined under the New Economic Policy.

The AP system for importing cars was criticised in the past for several reasons, prompting the government to plan a phase out of the system in 2015 so as to allow market liberalisation and more competitiveness in the automotive industry.

The phase-out was shelved following backlash from Bumiputera entrepreneurs.

Critics of the system, including economists, have said that although it provided employment and income, the AP system had been monopolised by wealthier Bumiputeras and did not help in expanding the community’s participation in technology transfer or manufacturing in the automotive business beyond import and distribution. 

There were also allegations of AP recipients selling their permits to non-Bumiputeras for quick gains.

In 2020, the National Automotive Policy that year maintained the open AP system.

In July last year, Investment, Trade and Industry Minister Datuk Seri Tengku Zafrul Tengku Abdul Aziz said the government had no plans to phase out the system amid questions on how Tesla was allowed to bring in its electric cars without APs. – June 18, 2024

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