The Ministry of International Trade and Industry (MITI) has implemented the New Open AP Policy beginning 1 January 2019. The implementation is in line with the Government’s decision on 23 December 2015 to continue the policy with some improvements including providing the opportunity to new Bumiputera entrepreneurs to participate in the industry. The new policy which should be implemented beginning 1 January 2017 was postponed for almost 2 years due to uncertainties in the domestic automotive market.
Open AP is an import permit facility given by MITI to qualified Bumiputera companies to import reconditioned vehicles for sales in the domestic market. The companies are subjected to the conditions and rules imposed by MITI.
The objectives of this new policy are:
i) to promote the development of the new Bumiputera entrepreneurs in the automotive industry;
ii) to ensure the policy continues to contribute to the country’s socio-economic goals; and
iii) to create market competitiveness that will benefit the consumers especially in terms of the prices and services.
Nearly 300 applications were received by MITI when an offer for application to become an Open AP company was made from 23 May 2016 to 21 June 2016. The offer which was made through a media statement dated 13 May 2016 was published in MITI’s portal and the mass media.
After an evaluation process, including an audit by a qualified independent auditor, the number of companies that qualified is 164 companies, in which 128 are existing companies and 36 are new. The conditions that need to be fulfilled, among others are, the company must be 100 per cent owned by Bumiputera including the key management posts, has at least 2 years of experience in selling and distributing the motor vehicles, and a strong financial position.
Under the new policy, there is no limit to the overall number of AP to be released throughout the year and companies may apply for additional AP based on their sales performance. At the moment, most of the new companies are still not fully in operation as they need to fulfil some technical requirements and be prepared for business operational matters.
MITI will continuously monitor and audit these Open AP companies. Under the new policy, if there is a breach of any of the conditions, MITI will take decisive measures including:
i) withdrawing or suspending the allocated and approved AP;
ii) blacklisting the companies (including every shareholder and board member of the company) from submitting any future application on Open AP; and
iii) taking a legal action against the company.
In 2018, MITI has blacklisted 9 existing companies for offenses – not complying with the conditions.