The government says it will continue to stringently regulate the new open approved permit (AP) system – which has been continued under the National Automotive Policy 2020 (NAP 2020) – to ensure the system is not abused, and that recipients are deserving of the permits granted to them under the policy.

Compliance audits carried out on open AP holders by the ministry of international trade and industry (MITI) will determine the number of permits that will be issued to them, said Malaysia Automotive, Robotics & IoT Institute (MARii) CEO Datuk Madani Sahari.

“The audits done by MITI are very rigorous, to make sure that it’s not a case that once you are an open AP holder, it is systematic that you will receive the APs in a structured manner,” he said during a briefing on the 2020 outlook for the local automotive industry earlier this week.

“It depends on the audit. If it is discovered that you are not able to use the APs to grow your business, then the number of permits given to you will be reduced, or will be nullified,” he added.

Last October, it was reported that nine companies had been blacklisted for allegedly misappropriating APs for the import and sale of motor vehicles. Some 50 firms in Kuala Lumpur and Selangor were audited, along with 10 companies in Sabah, Sarawak and Johor, and five in Penang.

Madani said that MITI has put forth a better mechanism to make sure that open AP recipients are carrying out real business using these permits.

“The whole idea of open APs is so that the recipient can participate in the auto industry, but in a real sense. This means having a proper dealership and giving proper warranties. The evaluation of new open AP applicants is very strict, and there is a lot of criteria for them to meet,” he explained.

The outline for the open AP policy requires that the company granted with the APs must provide buyers with at least a one-year warranty and maintenance service, or in cooperation with the OEM for the maintenance service.