Between Subsidising and Business Model
After the photos of the four AP Kings are being splashed on the front page of all the major newspapers in the country, I just wonder how this will affect their auto business.
Since the past two days, peculiar events are happening around the country. First we have the gangster incident in Sky Kingdom, now the official disclosure of the list of AP recipients. Both of the "settled" issues are among the most talked-about topic in the country. Both of them concern the welfare of Malays as well as Muslims (or the two combined - bumiputra). And both of them are to become the hotly debated subject in the UMNO General Assembly. I reiterate my question: do you think this is a co-incidence? I leave it to you readers to decide...
Back to the AP issue, I would like to give my two cents worth.
First of all, I do not object to most efforts implemented by the government to help the disadvantage group of our community (namely Bumiputra), and the AP system is no different.
I believe the Import Licensing through Approved Permit (AP) was introduced in the 70s with the objective of promoting and providing opportunities for bumi entrepreneurs in the automotive sector. Since then, many have been "chosen" to be recipient (mainly UMNO members) and sold their APs in order to get fast profit.
For the four so-called AP Kings, I believe they ought to be made role models to all the other AP recipients assuming they did not sell of their AP for fast track cash. I believe both Naza and Weststar Motorsport are doing quite well in their respective businesses. Naza even aroused the sore-loser comments from both Proton's adviser cum ex-PM and Proton's CEO which brought the AP issue to public eyes!
No doubt the AP system has benefited companies like Naza in their business. But isn't that the main objective of the AP system? Arent' the government happy to see that at least a few of bumi businessman are able to benefit from their policies? At last we are looking at a policy that works to the advantage of the bumi, albeit only a few selected ones. But I don't think we can expect the government to grant AP to each bumi right? Doing so will only encourage them sell their AP to people who are really committed to the auto business, thereby the fast money. But who can blame them?
I am not a AP recipient sympathizer, in fact, I would like to get a few AP myself so that I can sell to Naza or Weststar and settle all my outstanding loans to the bank. However, we must understand the bigger issue here. Naza is a well-known business entity in the automotive industry namely because they sell value-for-money cars like Naza Ria and Citra (apart from other luxurious models) to the rakyat. They have an effective business model (I hope) that thrives within the government's policy in the auto industry. However, as the business of the company grows, they will need more AP to serve the demand of their customers. Since the only way of importing car into the country is through the AP system, they are left with no choice but to apply for more. By doing so, they need to justify their actions to the government.
As you can see, the foreign cars auto business in our country is built on top of the AP system. Companies like Naza and Weststar have shaped their business model around the same system. In doing so, companies like this are able to survived and even thrived within a shielded environment. However, these companies must be made to realize that this form of hand-outs will come to an end someday. The government should not stop the implementation out of the blue and leave them hanging high and dry.
With the upcoming implementation of AFTA, I suggest the government officially announce their plans and datelines in removing the AP system. In doing so, we will be able to get a clear picture of who are the real competent players in the auto industry. Incompetent ones will definitely cry out loud to get public sympathy while the competent ones will build their next business model around the open market environment. So far we have only seen one company that is whining out loud even before full implementation of AFTA... you should know who by now...
Let's face it, not everyone is cut-out to be in business, furthermore the ever competitive automotive industry. We should let nature takes its course, and let the competent thrives. If 30 years of protection still fail to prepare ourselves for the real market forces, maybe we should concentrate our resources to other industries and let the foreign players take over. That way, the government will still receive revenues in terms of taxes.
I rest my case...
Since the past two days, peculiar events are happening around the country. First we have the gangster incident in Sky Kingdom, now the official disclosure of the list of AP recipients. Both of the "settled" issues are among the most talked-about topic in the country. Both of them concern the welfare of Malays as well as Muslims (or the two combined - bumiputra). And both of them are to become the hotly debated subject in the UMNO General Assembly. I reiterate my question: do you think this is a co-incidence? I leave it to you readers to decide...
Back to the AP issue, I would like to give my two cents worth.
First of all, I do not object to most efforts implemented by the government to help the disadvantage group of our community (namely Bumiputra), and the AP system is no different.
I believe the Import Licensing through Approved Permit (AP) was introduced in the 70s with the objective of promoting and providing opportunities for bumi entrepreneurs in the automotive sector. Since then, many have been "chosen" to be recipient (mainly UMNO members) and sold their APs in order to get fast profit.
For the four so-called AP Kings, I believe they ought to be made role models to all the other AP recipients assuming they did not sell of their AP for fast track cash. I believe both Naza and Weststar Motorsport are doing quite well in their respective businesses. Naza even aroused the sore-loser comments from both Proton's adviser cum ex-PM and Proton's CEO which brought the AP issue to public eyes!
No doubt the AP system has benefited companies like Naza in their business. But isn't that the main objective of the AP system? Arent' the government happy to see that at least a few of bumi businessman are able to benefit from their policies? At last we are looking at a policy that works to the advantage of the bumi, albeit only a few selected ones. But I don't think we can expect the government to grant AP to each bumi right? Doing so will only encourage them sell their AP to people who are really committed to the auto business, thereby the fast money. But who can blame them?
I am not a AP recipient sympathizer, in fact, I would like to get a few AP myself so that I can sell to Naza or Weststar and settle all my outstanding loans to the bank. However, we must understand the bigger issue here. Naza is a well-known business entity in the automotive industry namely because they sell value-for-money cars like Naza Ria and Citra (apart from other luxurious models) to the rakyat. They have an effective business model (I hope) that thrives within the government's policy in the auto industry. However, as the business of the company grows, they will need more AP to serve the demand of their customers. Since the only way of importing car into the country is through the AP system, they are left with no choice but to apply for more. By doing so, they need to justify their actions to the government.
As you can see, the foreign cars auto business in our country is built on top of the AP system. Companies like Naza and Weststar have shaped their business model around the same system. In doing so, companies like this are able to survived and even thrived within a shielded environment. However, these companies must be made to realize that this form of hand-outs will come to an end someday. The government should not stop the implementation out of the blue and leave them hanging high and dry.
With the upcoming implementation of AFTA, I suggest the government officially announce their plans and datelines in removing the AP system. In doing so, we will be able to get a clear picture of who are the real competent players in the auto industry. Incompetent ones will definitely cry out loud to get public sympathy while the competent ones will build their next business model around the open market environment. So far we have only seen one company that is whining out loud even before full implementation of AFTA... you should know who by now...
Let's face it, not everyone is cut-out to be in business, furthermore the ever competitive automotive industry. We should let nature takes its course, and let the competent thrives. If 30 years of protection still fail to prepare ourselves for the real market forces, maybe we should concentrate our resources to other industries and let the foreign players take over. That way, the government will still receive revenues in terms of taxes.
I rest my case...
posted by Egghead at
8:18 AM
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