LOCAL VENDORS SEEK OPPORTUNITY FROM FOREIGN BRAND ASSEMBLERS

By Tengku Noor Shamsiah Tengku Abdullah

KUALA LUMPUR, Oct 29 (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 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 Mustapa Mohamed announced
Wednesday 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 (US$43,763).

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