The issuance of Approved Permits (APs) is one of the 'running taps' currently bleeding the automotive industry, particularly national car maker Proton, of its resources and market share, claimed insiders.

The unrestricted import of completely-built-up (CBU) units from Asean countries, the promotion of assembly licences for foreign manufacturers and the status of Proton as a national car company were identified as the other open taps.

The tap analogy emerged during a discussion yesterday afternoon between Barisan Nasional Backbenchers Club's (BBC) fact-finding team and a group of Proton officials at Parliament House.

"The AP is only one of the taps in the national automotive policy. There are three others which have been contributing to the overall problem," said one of the officials, all of whom declined to be identified.

Citing the example about Asean member states being exempted from the current ceiling imposed for import of CBUs, they said the actual policy is made to appear redundant.

As for the promotion of assembly-line licences, the Proton officials said foreign auto makers required no investment as they "could use the existing assembly line in Pekan".

"These factors have been instrumental in derailing Proton," said another, summing up the prevailing scenario in the industry.

The eight-member sub-committee of the BBC's infrastructure and transportation committee has assigned itself the task of identifying the root causes of the ailing automotive industry, starting with the AP controversy.

Emulate Perodua

BBC chairperson Shahrir Abdul Samad, the team's advisor, urged other local car companies to emulate Perusahaan Otomobil Kedua Sdn Bhd's (Perodua) move to declare its equity structure, including the 28.4 percent stake held by Japan's Daihatsu Motor Co Ltd and Mitsui & Co.

Business Times , quoting from a statement issued by Perodua on Aug 5, reported its justification of the status as a national car company by having met all necessary requirements.

"Others should follow suit in being open about their overall business so that we can form a basis for comparison with regards Proton's performance, assets and infrastructure," he said.

"We also propose that the Cabinet direct the Auditor-General to audit the number of APs issued last year and this year against the number of vehicles registered with the Road Transport Department (RTD).

"A check with Customs will also show if there has been any tax evasion or smuggling activities," he said, noting an urgent need for "an independent watchdog" for the automotive industry.

The discussion also revolved around Proton's failure to penetrate into regional markets such as Indonesia and Thailand.

This was explained as due to prevailing bilateral agreements on tariff barriers in relation to Afta (Asean Free Trade Agreement), WTO (World Trade Organisation) and the MFN (most-favoured nation) status.

One of the suggestions was to grant APs to franchise-holders as opposed to franchising the APs.

Meeting with Rafidah

The team led by Ledang MP Hamim Samuri ( pix ) has, over the last six weeks, consulted with the Proton management, Proton Vendor Association, Malay Car Importers and Dealers Association of Malaysia (Pekema) and former premier and current Proton adviser Dr Mahathir Mohamad .

Hamim said although the focus was more on APs, the overall feedback is being fine-tuned for the soon-to-be-announced national automotive policy.

"But before that, we want to clear several issues with (International Trade and Industry Minister) Rafidah (Aziz) whom we are scheduled to meet on Friday," he said.

"We want to know, among others, whether the total number of bumiputera distributors tallies with the total number of bumiputera AP holders.

"This is because we suspect that thousands of APs, both open and franchised, are being sold to parties who are not distributors."

The other issue, he said, was the badging of brands unheard of or unknown outside of Malaysia.

"We doubt the intentions of those who import cars said to be tuned-up units but later slapped with unknown badges which effectively turn it into a tuned-down unit before being sold.

He said that tuned-up units bore proof of overall upgrades whereas tuned-down units had a change of badges.

Hamim said besides Rafidah, the team also planned to meet Proton Edar, the car maker's distribution arms, the RTD and Customs officials.

Greater transparency

Another team member Jasin MP Mohd Said Yusof said the consultations were not only to address the AP issue but the whole automotive policy.

"I had suggested in my speech at the Umno general assembly recently that a senior minister be tasked with ensuring the increase of bumiputera businessmen.

"If Proton laku (sells well), then maybe Proton Edar could have more than the present 100-odd businessmen."

Citing Petronas as an example of the oil and gas industry leader, he said that Proton was not leading the auto industry as it should due to "much more advantages given to others".

He said the team wanted "fairer distribution and greater transparency in the automotive industry".

"We are also aware of people who are desperately sourcing for showrooms in order to qualify for APs this year. The heat is on in the race for APs," he said, declining to furnish any details.

The BBC team is trying to prepare a comprehensive proposal before the national automotive policy is unveiled .