Auto parts traders seek clarification from KPDNHEP for operation under spare parts sector – association

The Malaysia Used Vehicle Autoparts Traders Association (MUVATA) has called upon the government to clarify the position of new and used automotive parts importers, exporters, wholesalers and retailers it represents to be classified under the spare parts sector, the association wrote in an e-mailed statement.

The association pleads with the ministry of domestic trade and consumer affairs (KPDNHEP) to clarify that businesses dealing in auto parts are under the spare parts sector, which have been allowed to operate, along with car workshops and tyre shops, under FMCO conditions as of June 1.

It states that most of its members have received approval to operate from the Covid-19 intelligent management system (CIMS) 3.0 under the purview of the ministry of international trade and industry (MITI), having selected peruncitan, pengedaran dan pemborongan (retail, distribution or wholesaling), with the sub-sectors of bengkel, penyelenggaraan dan alat ganti (workshops, maintenance and spare parts).

Reports have, however, been received from a few of its members in Johor Bahru, said MUVATA, saying they have been told by the Johor Bahru City Council (MBJB) that they are to shut down immediately as they are deemed not to be categorised under the auto parts sector, and an MBJB officer said that the alat ganti term for permitted businesses is only applicable to those trading in new auto parts, the statement read.

A similar situation was reportedly encountered by the association’s members in Perak, where the police have deemed the businesses’ selected category on the forms to be incorrect, and therefore have also been told to shut down. MUVATA says that used auto parts business operators are now very confused, and some have not dared to remain open for fear of receiving hefty fines, it said, adding that “guidelines need to be clear and consistent, otherwise [it] will burden the industry.”

In terms of operations, MUVATA hopes that the authorities understand that unlike businesses trading in new auto parts, traders of used parts need to carry out minor dismantling work in order to obtain said used parts, such as by taking apart a large group of components to acquire smaller, individual parts.

The association suggests that enforcement agencies have perhaps misunderstood used auto parts as being under the manufacturing sector, and therefore have not allowed essential auto parts businesses to operate, and clarifies that the parts selection processes are purely to the customers’ requirements.

“We wish to convey that it is crucial for new and used auto parts to go hand-in-hand with workshops, as it is useless for workshops to operate without auto parts, new or used,” the statement from MUVATA read. It adds that the logistics sector, which serves transportation for medicine, food and beverage, is reliant on repairs and servicing, and that disruptions in parts supply may see workshops face major challenges.

According to an internal survey held by MUVATA, 20% of its members have stated that they are unable to survive, and would be forced to close down if the lockdown is prolonged. While the auto parts sector is listed as an essential category, its members’ business volume has dropped by nearly 70% in this full movement control order (FMCO), it said.

The association also asks for the government to allow used auto parts companies with the relevant approval letters to operate with a workforce of 60%, for businesses including wholesale, export and the dismantling and sorting of auto parts, and not just for selling to local workshops. In closing, the MUVATA statement reads that “the industry welcomes the automatic bank loan moratorium, as well as the extension and enhancement of the wage subsidy programme.”

Upon the FMCO taking effect on June 1, vehicle repair (body and paint) and service centres have been allowed to operate at 60% worker capacity, KPDNHEP minister Datuk Seri Alexander Nanta Linggi said at the time. MUVATA also calls for the acceleration of the mass immunisation programme, including for the auto parts sectors as its members’ personnel are customer-facing and therefore are frontliners, as they have to be physically present to discharge their duties and tasks.

Meanwhile in the area of new vehicles, sales are expected to approach zero for the month of June as showrooms nationwide are closed due to the FMCO, with significant financial impact, reported Berita Harian last week. Based on an average vehicle price of RM70,000, the country’s automotive industry is set to lose around RM3.44 billion in revenue due to the sales slump.

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