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.

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?