Dr M: Maintain AP system or Proton will die
As Putrajaya takes baby steps to liberalise the automobile industry, former prime minister Dr Mahathir Mohamad warns that abolishing the Approved Permit (AP) system will cause the national car makers and bumiputera car retailers to suffer.
As Putrajaya takes baby steps to liberalise the automobile industry, former prime minister Dr Mahathir Mohamad warns that abolishing the Approved Permit (AP) system will cause the national car makers and bumiputera car retailers to suffer.
Mahathir, the father of local car maker Proton Holdings Bhd, said foreign manufacturers would flood the car market without the AP system and sound the "death knell" of the national car industry.
In a posting on his blog today, Mahathir said Malays and other bumiputeras were unable to enter the automotive business without the AP system as they were new to the business.
"Business people do not like to do business with strangers. It is difficult to build trust with a business partner or an agent when you do not know their background.
"Worse still, when you know the stranger has no capital and no experience," Mahathir wrote.
He explained that only a few Malays could afford to import used cars in the past and this had frustrated the implementation of the New Economic Policy objective of eliminating the identification of race with economic functions.
"It was to overcome this that the government allowed the importation of Japanese reconditioned cars. APs were issued for the aspiring Malay auto dealers.
"Now, second-hand Japanese cars are no longer imported. The AP system continued for new and second-hand special models. The demand is such that auto dealers are prepared to buy the APs at high prices," Mahathir says in his blog.
Other industries too have APs
The AP system provides a special import duty waiver for automobiles. Qualified car dealers can obtain these documents from the International Trade and Industry Ministry.
As part of their benefits, members of parliament are allocated one AP, regardless of the number of terms they have served, and this cannot be sold.
Adding a racial slant to the AP system debate, Mahathir said there are similar systems for sugar, flour, rice and other items.
"Some people have benefited from this system over the past 80 years. They have become billionaires. There has been no demand to stop these APs. The recipients live a charmed life.
"If we must reconsider the AP system, it must include all the APs. The effect on our economy and trade balance must be accepted by us all," adds Mahathir.
