Miti: AP system to remain, with improvements

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A file picture of imported cars parked at Klang's Northport, awaiting APs to be issued.

PETALING JAYA: The Open Approved Permit (AP) system will continue to be carried out but with improvements, following thorough research done by the Government on the used imported cars industry, says the International Trade and Industry Ministry (Miti).

In a statement, Miti said that the system, along with new improvements, would come into effect Jan 1, 2017.

Among the improvements include allowing eligible new bumiputera companies who strictly adhere to the criteria to participate in the used car business.

The Government will also carry out a program to utilise some of the revenue contribution from the Open AP system to enable the public to directly benefit from it, with specific details to be announced soon.

In the research carried out, issues covered included analysis on the AP's effects, contribution and implications of the Open AP system to the development of the automotive industry and the social economic impact to the country, among others.

The research was conducted over six months and took into account the opinions of various parties, including industry players, consumer associations, several NGOs and politicians.

"The research team opined that the current Open AP system gives opportunities to the public to purchase used imported cars at a competitive price.

"They also found that the distribution and importation of used-cars industry contributed significantly to the automotive industry and the country's socio-economic development," said Miti.

Its contribution to the supporting businesses and service sectors such as banking, insurance, shipping and logistics was estimated to be RM450mil a year.

It also directly provided job opportunities to 3,800 high- and medium-income earners. The Government also collects some RM2bil a year from taxes.

The study also found that the Open AP system contributed 5% out of the 36% bumiputera equity in the automotive sector.

"If the system were discontinued, there would be no more used imported cars allowed into the country and this would deny many people the opportunity to buy such cars. Also, the percentage of Bumiputra equity participation in the automotive sector would reduce to 31%," said Miti.

In line with the improvements, a qualified and independent auditor would be selected to audit all companies involved to ensure compliance to the new criteria.