The automotive industry comprises of the motor vehicles namely passenger vehicles, commercial vehicles, motorcycles and scooters; and parts & components. The ecosystem of the automotive industry in Malaysia is illustrated in Figure 1 below:
Summary
I 138 I
Import Restrictions:
Approved Permits (AP), issued by the Ministry of International Trade and Industry (MITI) acts as a control mechanism limiting the number of cars imported into Malaysia. It was gazette based on the Malaysian Customs Act 1967, in 1983 as a measure to protect the National Car – PROTON and later PERODUA. PROTON is a joint venture with Mitsubishi while PERODUA is with Daihatsu.
There are two types of AP 1) Franchise AP - that are given out for free to franchise holders of car brands registered with MITI and 2) Open AP – that are sold to parallel importers of cars for resale in the Malaysian market
The total annual number of APs issued is usually capped at ten percent of the number of locally assembled cars of the previous year. The allocations of these APs are usually in the ratio of
- 60 percent to Bumiputera for Open AP holders
- 40 percent to franchise holders
However, the end of the APs was supposed to be in 2010 but was repealed based on objections from stakeholders of vested interest and extended to December 31st, 2015. However in December 2015, the Malaysian government announced that the Open Approved Permit (Open AP) policy will be retained with amendments made to improve the system.
The objectives of the new Open AP policy were supposed to:
-
-
-
Local/Regional Content Requirements:
Currently, local content requirements are 30% - 45% for non-national cars and about 80% for national cars, and the local content requirements for non-PROTON assemblers include 30 mandatory items.
Others
One of the crucial impediments for US made vehicles is the left-hand drive mechanism. Malaysia is a right-hand drive following the British standards. The inconveniences of having a left-hand drive when the whole transport infrastructure caters to right hand drive vehicles.
Market Entry & Barriers
Figure 1Automotive eco-system in Malaysia (Source: MIDA)
malaysia