How Franchise AP Holders Make Their Money
It’s not just Open AP holders which can make money by hawking APs. This is how Franchise AP holders make their money without much effort. To me it is the equivalent of AP hawking with just a little more effort.
Let’s use Honda cars for example. In Malaysia, Hondas are marketed and distributed by Honda Malaysia Sdn Bhd, a joint venture company between Honda Motor Co., Ltd. of Japan, DRB–HICOM Berhad and Oriental Holdings Berhad.
I do not see Honda Malaysia Sdn. Bhd. in the AP recipients list.
But I do see an AP king trio of Syed Azman, Mohd Haniff and Azzuddin holding the most APs. And one of their companies is Weststar Motorsport, which is said to be the franchise AP holder for Honda cars in Malaysia.
From Jeff Ooi’s blog on 25th October 2004.
The distortion the AP system to automobile market in Malaysia is daunting and ridiculous. Marque owner BMW has to buy APs from these AP hawkers if it wants to import BMW CBUs into the country!
And this applies to other marques like Mercedez-Benz, Hyundai and Honda.
Weststar Motorsport received 7603 APs in 2005 so far. It’s only half a year now. With a market rate of RM30,000 per AP, that’s a nice amount of roughly RM228 million ringgit worth of APs.
However, I do not see Weststar Motorsport having any distributor chain of Honda cars anywhere.
Perhaps a distribution chain is not needed. Maybe all they need is a small office to process AP purchase orders.
Could it be Honda Malaysia has to buy APs from Weststar Motorsport in order to import their own vehicles into Malaysia?
I quote a comment from Jeff Ooi’s blog.
Likely scenario, Honda brings in the Honda cars but use APs from Syed. Syed can even be stated the importer. Imports at x and than sells to Honda at x + 20k. We than have to buy the car at x+20k+Y. So he makes 20k easy and we consumer have to pay for this!!!
In an interview with Bernama, this is what the AP King, Weststar Motorsport managing director Datuk Seri Syed Azman Syed Ibrahim said:
I may have been given thousands of APs but these are franchise APs. Franchise APs are just permits to bring in cars from a particular foreign factory to be sold through a particular company in Malaysia.
The public seems to perceive that the AP business is like a money-printing machine with just a piece of AP you make tens of thousand. It certainly is not the case with franchise AP holders like us.
Yes of course. So that Honda Malaysia can get a steady supply of thousands of APs from you, no?
In the same Bernama article Weststar also says it has a network of 110 dealerships but I frankly think these numbers actually belong to Honda Malaysia Sdn Bhd.
From an article in The Edge Daily:
DRB-Hicom has an arrangement with Auto Pacific Star Sdn Bhd, which gets the APs from Miti to bring in the Chevrolet marques. After importing the vehicles, Auto Pacific Star delivers them to DRB-Hicom for distribution to its dealership network.
This is similar to the set-up of Hyundai Berjaya Corp Bhd, which sources imported Hyundai CBUs (completely built up) from privately held Hyumal Motor Sdn Bhd. Other examples include BMW Malaysia Sdn Bhd’s relationship with Cartrade Sdn Bhd, DaimlerChrysler Malaysia Sdn Bhd with NZWheel Sdn Bhd (a unit of the Naza group) and Honda Malaysia with WestStar Motorsport Sdn Bhd. Cartrade, which is substantially owned by Mohamed Ilyas Parker Mohamed, gets APs for the import of BMW CBUs . NZWheel gets APs to import Mercedes-Benz CBUs while WestStar Motorsport brings in the Honda CBUs.
The article is offline now, but you can access it via Google Cache.
Does the franchise AP holders actually do anything else other than importing and reselling them to the marque’s representatives in Malaysia at higher prices which include the AP cost? To become a franchise AP importer, I only need some inventory space to store cars and an inspection center to earn this much money?
And how does this actually help the bumiputera businessmen become better entrepreneurs when they have a guaranteed customer, the original marque distributor? Sales and marketing are all done by the marque’s distributor anyway.
In Honda’s case, Weststar Motorsport brings the cars in and hands over the car and responsibilities of how the car is going to reach the consumer’s hands to Honda Malaysia. And I reckon they only import as much as what’s requested.
Macam ini siapa pun boleh buat?
I quote Syed again.
The public seems to perceive that the AP business is like a money-printing machine with just a piece of AP you make tens of thousand. It certainly is not the case with franchise AP holders like us
It certainly seems like a heavily disguised money-printing machine to me, though not as blatant as hawking Open APs.
What do you think, my dear readers?
July 24, 2005 @ 3:22 pm
It disgusts me that these selected Bumi businessmen, and Rafidah, can tell so many bald-faced lies and twisted spins to cover up their money-printing manipulations.
You are right, if they claim it is such hard work to distribute the cars, then *where* are their dealerships? What efforts have they exactly done?
Rafidah says in The Star today that they have to work hard to secure sole distributorship status from car manufacturers. How hard can that be when you tell the manufacturers:” look, only people with APs like me can import in your cars. So you are going to give me sole distributorship or not?”
July 24, 2005 @ 4:48 pm
car buyers has been paying so much extra for the imported car just to feed all these unshameful money greedy souls who are directly benefiting from the AP. may God have mercy on the greedy people… may the rakyat be wise enough to choose the just government please..
July 24, 2005 @ 5:24 pm
How much can we, as an idividuals, voice our concern??? even penang, when we, as citizens of the island, signed hundred of thousands of petitions to stop the Penang Outer Ring Road (PORR), there is no stopping them to continue their project by just a wave from the government saying we need them… fyi, this bridge cost more than the north south highway… and one of the contractors, Seri Meraga, which havent complete their bridge in Bayan Baru area, due in years… guess what, rumours say sami vellu have a share in it too… anyone can verify this??? well, in short, is our government working for themselves or for the malaysian citizen???
July 24, 2005 @ 5:44 pm
well.. they really can make easy money..
July 24, 2005 @ 11:08 pm
If APs are such a simple money making machines why don’t the Government consider giving all these APs to Permodalan Nasional Berhad (PNB) or Amanah Saham Bumiputera or WAKAF instead of individual businessmen. By doing this, it will benefit bumiputeras that purchase ASB or the poor as in WAKAF. I think the PM is thinking of changes and this is a good sign. I hope he will make the changes. The Government should think of benefitting the wider population of bumiputera instead of a few individuals.
July 25, 2005 @ 12:29 am
some debates about AP :
http://www.zerotohundred.com/newforums/showthread.php?t=37237&page=1&pp=15
July 25, 2005 @ 1:50 am
this is so………frustrating!! i really don’t no what to say…..it really sucks to learn how these MF Bastards are playing with systems and making tonnes of money….let’s hope this news spreads and maybe…just maybe…someone can do something to stop this BS!
July 25, 2005 @ 9:53 am
this really really need to brought up to the surface, we really need to voice it out!!! Or else after a few days, everything will go back to wat it “should be” already…
July 25, 2005 @ 10:56 am
Wow lots of great comment. Just call AP’s BIAWAK! Our government create those biawak and we RAKYAT hv to PIKUL them
July 25, 2005 @ 1:59 pm
Whatever it is, what ever we say, they want to help those UMNOputra’s..There is nothing we can do…Live it or just get the fork out of Malaysia.
July 26, 2005 @ 10:51 am
hell no i’m gonna fork out of M’sia… this is my country, my land, my birthplace… i love this country… it is the govt.that should be forked out of the arena!!! & i’m not just talking about the UMNO but the BN!!! no matter MIC or MCA & espacially UMNO… i casted my vote to the opposite, & i know BN still win, but atleast i’m not the one who contribute to BN winning…
July 26, 2005 @ 11:18 am
buy Proton la…at least all the profit goes to the Gov to provide better facilities,medical fees to the rakyat…unlike buy imported car in which the money goes to these greedy,bloodsucking AP king’s pocket…
July 26, 2005 @ 11:45 am
Dear Paul – no doubt about it – your readers have just clearly illustrated that to make money with AP’s is only a little more difficult than making MAGGI instant mee for breakfast.
It is disheartening to a loyal Malaysian to hear his brothers and sisters actually try to convince people about how difficult it is – from those in the cabinet, to those spending their time on the golf courses – but then this is only what we should expect isn’t it ? WHO you know, compared to WHAT you know, go to big brother for help at any oppurtunity – these are the values that have been driven home time and again.
The weekend’s proceedings have now at least given me a little bit more hope – some people amongst the powers that need be, now seem to recognise that typical Malaysian businessmen like those involved in the AP money printing business are merely cannon fodder in the international circuit.
Let us hope so.
July 27, 2005 @ 2:39 am
I’m quite doubtful about the whole real purpose of AP. A few days back there was a report on UMNO AGM where the members raised the AP issue and one of them were saying something like this, if I’m not mistaken. He actually suggested if these APs were distributed among the senior members like each one of them with one AP so they will have extra funds to support and aid its people.
The question that I wished to raise here is that; If I’m not mistaken, someone with AP is able to import foreign car into Malaysia, right? UMNO members are not businessman who runs an automobile dealerships or something like that. So, how can an AP helps to provide extra cash to them? Are they trying to say that they are going to sell off these AP to other parties and get the cash themselves? He even said that, if these APs were distributed and they have extra fund, they wouldn’t had sold of their UMNO building in order to be financially-abled.
It is really sickening seeing these people making easy money with our hard-earned. Can’t they really just go by the road and not to take any short-cuts? Hmm.. maybe these are what we called a businessman. And these so-called UMNO members, from what I saw in the newspaper reports, they only gave me one idea, that they are really D*MN CHILDISH! Well, these are just my two-cents.
July 29, 2005 @ 2:01 pm
.. nothing to say other than keeping my fingers tied before i type some vulgar words here..
July 30, 2005 @ 7:14 am
My gosh. All these years I’ve been thinking that those super expensive imported cars are high priced because of government’s high taxes on them. What the f**K! All our hard-earned money goes to those few businessmen who do nothing except bring in cars and give it to others to do the rest and still makes thousands of dollars from consumers.
And after seeing the houses of the kanasai Dato Syed apa apa…I’m even more furious of these ppl.
Well hope the government do something about it. It’s difficult to change overnight but at least do something to lower the cost of a car…
August 18, 2005 @ 7:56 pm
Most of us do not have the luxury of getting the f#%@ of Msia and why should we? This is our place, our right of passage. While I have a few more choice expletives that I could add, for the chain of people responsible I shall exercise restraint and not stoop that low to grant them the satisfaction.
Desperate times call for desperate measures. One factor left out of this AP equation is why we continue to buy new cars? Now more than ever, we should exercise people power in a sane and economically rational way. Stop buying new cars. Then we’ll see some real action.
August 20, 2005 @ 11:22 pm
Well fellas what do you know… selling cars is not as simple as buy and sell thingy, try open up a car dealership , then you’ll know how though it is to sell a single car, as these filthy rich AP holders are mere selling cars to those hardworking entrepreuneurs they don’t need to face the customers to sell their cars… really easy money…
August 22, 2005 @ 5:39 pm
dato seri syed azman syed ibrahim is my idol…! they group will be still number one muslim importers in malaysia
October 20, 2005 @ 5:06 pm
sepandai-pandainya tupai melompat….
akhirnya jatuh ke tanah juga…
December 29, 2005 @ 12:28 am
How can locals afford owning a car when half of Malaysia are still living in poverty!!
There is still significant poverty in Malaysia
In its article titled “The Mahathir Mystiqueâ€, Newsweek, (23 November 2003) terms Malaysia as an Asian success story where “the percentage of Malaysian households that fall below the poverty line has plunged from nearly 50 per cent to an estimated 6 per cent in 2000.†The figures quoted by Newsweek are lifted from Mahathir’s 2004 budget speech in Parliament on 12 September 2003. From the horses’ mouth as they say — but unfortunately some horses have learnt to bluff!
The poverty line
Generally speaking, the poverty rate can be lowered by two methods. The first is by raising the income of the poorer families to above the poverty line. The second method, and undoubtedly the easier option, is to lower the poverty line itself!
Can a family of five survive on an income of RM550 per month, given the cost of living in Malaysia today? Where would they live? And can their children go to school?
Malaysian household income distribution as quoted in the Eighth Malaysia Plan is pictured in Table 1 — with 75 per cent of Malaysian households earning below RM3,000 per month and 25 per cent of households earning below RM1,000 monthly. The same document (8MP) also specifies the poverty line for Semenanjung Malaysia as RM540 per month for a family of five individuals. Is this a realistic figure?
A living wage?
Table 1 – Household Income (RM/month)
More than RM5,000 9.8%
RM4,001 – RM5,000 5.5%
RM3,001 – RM4,000 9.6%
RM2,001 – RM3,000 17.4%
RM1,001 – RM2,000 32.7%
RM501 – RM1,001 20.0%
Less than RM500 5.0%
Source: Eighth Malaysia Plan.
Can a family of five survive on an income of RM550 per month, given the cost of living in Malaysia today? Where would they live? And can their children go to school? Yet given the government’s definition, they would not be classified as being poor.
At a meeting with 60 factory workers in Sg Siput recently, we asked them to suggest a reasonable household budget, and the outcome of that exercise is summarized in Table 2. The participants felt that the cost of buying a house and a small allocation for savings must be part of a balanced family budget. In their opinion, any family with a household budget of below RM1,750 would be facing economic hardship;
A realistic poverty line
Table 2 – Household Expenditure (per month)
House Loan 400
Marketing 300
Groceries 300
School expenses 200
Motorbike 150
Medical/Clothes 100
Festivals/Trips 100
Light/Water/Phone 100
Insurance/savings 100
Total RM1,750
In Britain and in several other countries in the European Union, the poverty line is defined as one half the average household income. In Malaysia, the average household income is RM3,200 per month. Half this figure would be RM1,600. In other words if we used the definition used in Britain, households earning less than RM1,600 per month would be considered as poor! If RM1,600 per month is taken as the realistic poverty line, then around 50 per cent of Malaysians are poor — see the Income Pyramid overleaf — and this is the level of poverty as quoted by Mahathir for 1970!
No one is denying that there has been significant growth in the national economy. Per capita income (Per capita income = total income of the nation for that year divided by the population) has soared from RM1,132 in 1970 to RM13,683 presently! (Incidently, this would work out to an average household income of RM5,534 per month.) However as the income distribution pyramid depicts, the distribution of income in Malaysia is skewed towards the rich, and there is still significant poverty in Malaysia.
Perhaps the most incredulous aspect of Malaysia’s poverty statistics is that it hasn’t been challenged by the mainstream media nor by the academicians. Big Brother’s doublespeak (term used by Orwell in his book 1984) apparently rules supreme in Malaysia today!
March 27, 2006 @ 6:01 pm
[...] This means AP Kings Haniff and Syed Azman will lose their easy money making factory from importing Chevrolet (DRB-Hicom), Suzuki (DRB-Hicom) and Honda (36% owned by DRB-Hicom) marques. Suprise, suprise. The AP kings are not AP kings anymore. Click here to see what APs have given them. This should bump up the rakyat’s respect for Pak Lah a few notches. [...]
April 17, 2006 @ 8:54 am
[...] The APs for DRB-HICOM’s cars are awarded to it’s wholly owned subsidiary DRB-Hicom Auto Solutions Sdn Bhd. The AP kings Syed Azman and Mohd Haniff will not be able to mint free money anymore. [...]
April 19, 2006 @ 10:17 am
so much for being an islamic country, the manner in which these AP kings conduct business seems more jewish to me.
July 6, 2006 @ 9:13 am
[...] I am disappointed at this as it is similiar to the shake leg AP middlemen situation which existed back before the new National Automotive Policy was formed. The fact that AutoStadt Asia Sdn Bhd’s owners are the same people who owned Emeritus Equities Sdn Bhd who lost their rice bowl when the government stopped giving them Kleemann APs gives you more reason to be suspicious. If you want to know who the owners are, click here. You will not be suprised. [...]
July 7, 2006 @ 4:21 am
[...] To be honest, it really isn’t that difficult when there are so many delicious topics to choose from. One could even say that certain hot issues, usually involving MPs with perpetual foot-in-mouth disease seem to make it all too easy for us. It would take great discipline and/or RM50 million with a few APs thrown in to shut us whining lot up. [...]
September 19, 2006 @ 4:01 pm
[...] From the period of January 2005 to August 2005, Honda Malaysia recorded sales of 16,124 CKD units and 3,061 CBU units. This is why Haniff is so rich. He holds the Honda CBU APs. [...]