Local Vendors Seek Opportunity From Foreign Brand Assemblers

October 30, 2009 12:15 PM

Local Vendors Seek Opportunity From Foreign Brand Assemblers

By: Ramjit

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KUALA LUMPUR, Oct 30 (Bernama) -- Foreign brand assemblers should provide opportunity for locals vendors to participate in their development programmes, according to the Proton Vendors Association (PVA).

They should also increase the purchase of parts and components from competitive local vendors, said PVA president Datuk Dr Wan Mohamed Wan Embong.

Wan Mohamed said this was the main reason why the association gave full backing for the Industry Adjustment Fund (IAF) to be continued by the government.

"We proposed that the IAF be increased with greater use of local content or participation of local vendors," he told Bernama.

International Trade and Industry Minister Datuk Mustapa Mohamed announced yesterday that under the National Automotive Policy (NAP) review, foreign firms would be given manufacturing licences to hold 100 per cent equity in firms which produce luxury vehicles with an engine capacity of more than 1,800cc and costing more than RM150,000.

The approved permit (AP) system would be scrapped in 2015 for open AP and 2020 for franchise AP while import duties on completely built-up (CBU) and completely knocked-down (CKD) cars would be maintained, he said.

Eighteen new policies and measures covering licensing, duties, incentives, technology and environment, safety and standards, and APs were introduced under the NAP review.

Asked on whether the association was satisfied with the review, Wan Mohamed said: "It is very difficult to say. We are satisfied as we think it is a move in the right direction towards achieving progressive total liberalisation of the industry until which level we become competitive."

However, he said the deadlines on various issues should not be changed again.

"These are promises, so it is a long way to say that we are satisfied," Wan Mohamed said.

"But most important the NAP review maintained a certain level of consistency for areas that are necessary for long-term investment and development, except possibly the extension of APs to December 2020 instead of what was spelled out earlier," he said.

"2015 is only for non-franchise APs but there will be new review of policy and direction before we achieve the objectives, especially a competitive and vibrant automotive industry that can grow and develop."

Wan Mohamed said the PVA was pleased that some of its recommendations were taken into consideration in the NAP review.

"The liberalisation to allow 100 per cent ownership for the manufacturing of passenger cars, in particular of 1,800cc and above and with the selling price of RM150,000, as well as pick-up trucks is excellent," he said.

"So we hope that foreign investors will see this as something positive, especially those in the luxury car segment. This is very positive overall."

Wan Mohamed said the ban on importation of second-hand and used parts from January 2010 under the review would improve the level of safety for motor vehicle users, stakeholders and road users.

"Some of these used parts are generally are not subjected to any quality or safety tests. We need to regulate and this is a good move," he said, adding that local vendors would also be able to expand their services to this segment.

According to Wan Mohamed, there should be a commitment for the government to introduce Malaysia's own standards for parts and components.

He said this should not only be in terms of having the standards but "you need to have good enforcement of the standards too".

"We have been saying this for a long time. We cannot allow the market to be a dumping ground for parts or components from all over the world," he added.

Wan Mohamed said besides parts and components, the goverment needed to re affirm its commitment to have in place the full vehicle of type of approval.

"Our contention is for government to consider using part of the Proton facilities in order to maximise utilisation of the existing assets. This will help reduce overall expenditure. I believe it can be worked out," he said.

-- BERNAMA

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