Bank Negara Malaysia’s new guideline on responsible financing, which tightened the criteria for auto financing, has impacted the automotive industry, especially budget car players. Proton Edar Dealers Association Malaysia (PEDA) has been among the most vocal opponents, claiming that only 30% of loan applications were approved in January.

Industry players met BNM last week and Perodua MD Datuk Aminar Rashid Salleh said the meeting was beneficial as it addressed serious issues.

“We are committed to support the government’s initiatives, in particular to address the rising household debt, but we would also appreciate it if the government and its regulatory bodies would consult the players to better understand the impact to the industry prior to the implementation of any new initiatives or measures,” he said.

Aminar added that partly due to the implementation of BNM’s financing guideline, the inventory of vehicles has risen and if left unchecked may need a downward revision to production planning. He added that the automotive ecosystem has also been hit as approval time for loans has lengthened, affecting sales of dealers.

He urged that the new guidelines be implemented in stages to allow a soft landing for both the players and consumers. Aminar said financing institutions should also take into consideration of the government’s desire to see growth in the industry by increasing competitiveness as well as a better business environment for all, in line with its comments on the soon-to-be announced revised National Automotive Policy.

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