Voices...

CAR DEALERS IN MALAYSIA REMAIN CONCERNED

2012-02-26T16:40:00.002-08:00

AUTOMOTIVE players are apparently not happy with the outcome of their dialogue with Bank Negara Malaysia last Friday to help resolve issues related to the new lending guidelines.

After the nearly two-hour meeting, Bank Negara appeared to focus more on the implementation of the new ruling, and less on the ruling itself, Proton Edar Dealers' Association (Peda) said.

Its president Armin Baniaz Pahamin said Peda lauded Bank Negara's resolution to ask banks to issue a standard guideline to educate the public on standard approval criteria and documentation required for vehicle loan processing.

But the automotive market is still in crisis from slow and low hire purchase loan approval rate, Armin said.

The Malaysian Automotive Association (MAA) last week said new vehicle sales in January had dropped 25 per cent or a whopping 13,833 units to 40,948 units, from 54,781 units in the same month in 2011.

Industry players claimed that the stricter hire purchase processes since January 1 this year had caused a high rejection rate for such loans.

Armin said the approval rate for vehicle financing in January was only 30 per cent although Bank Negara's official records show a 54 per cent approval.

"Peda understands and shares the objective and intent of the guideline, which promotes lending based on affordability but the interpretation of affordability was overplayed by the banks.

"Although in record the approval rate was 54 per cent for vehicle financing in January, a substantial number of loan applications were not even accepted for processing (thus did not add to the statistics of loan submission), which totalled up to an only 30 per cent approval rate," he claimed.

He added that the general public will not even visit a car showroom if they think they do not qualify to apply for car loans.

"By this time, the damage to the industry will be severe and vehicle manufacturers will have to revise their production downwards. This will in turn affect the entire system," Armin said in a statement yesterday.

Armin believes the automotive industry's business environment will be improved with the Bank Negara clarification and it looks forward to a speedy solution.

Meanwhile, Peda plans to meet the Ministry of International Trade and Industry and Ministry of Finance to seek a revision on vehicle excise and taxes and discuss other methods that could lead to cheaper cars.

Armin said with cheaper cars through lower excise and tax or other means, Malaysians can afford to buy cars without affecting the automotive ecosystem.

He added that the industry's growth will be sustained and household debts will be reduced when cars are priced lower.

"When more people can afford to buy cheaper cars, we can also benefit from a good economies of scale that will be translated into further reduction in car prices," he said.

He noted that the average population-to-vehicle ratio in developed countries such as America and Europe are three times higher than Malaysia because their cars are cheaper and more affordable.

Armin said Peda would also seek further clarification on the government's future direction for the automotive industry.

THE EDGE FINANCIAL: PROTON EDAR DEALERS ASSOCIATION SEEKS SOLUTION TOWARDS MORE AFFORDABLE CARS

2012-02-25T17:26:00.001-08:00

THE EDGE FINANCIAL DAILY 26 FEBRUARY 2012

PETALING JAYA: Proton car dealers have welcomed Bank Negara Malaysia's efforts to meet with banks to clarify its new guidelines for borrowers.

Proton Edar Dealers Association Malaysia (Peda) president Armin Baniaz Pahamin said the meeting on Friday followed concerns expressed that many banks were “overzealous” in interpreting the guidelines and had asked for more documentation.

As a result, sales have been “severely damaged” with only 30% of applicants able to secure financing for new Proton cars last month, said Armin.

“We support the guidelines but not the implementation by banks, especially the interpretation of affordability,” he said yesterday.

Since Jan 1, banks have put in place tighter guidelines for consumer loans, calculating loans based on net income rather than gross income. The maximum tenure for car loans is now capped at nine years.

On Wednesday, it was reported that the income of more than 4,500 sales advisers employed by the Proton dealers' network has been badly impacted.

It was claimed that they were unable to earn commission from sales after customers' loan applications were rejected due to the stringent requirements.

Bank Negara had met with industry players on Friday and assured them that the guidelines would not hamper access to financing.

“Bank Negara has written to financial institutions to ensure that consumers who have the ability and capacity to repay should continue to have access to such financing,” it said in a statement.

“While there have been some reduction in the total number of vehicle financing applications received between December 2011 and last month, due in part to the shorter working month, the approval rate for vehicle financing has remained stable at about 54% for January,” it noted.

In response, Armin said although the approval rate was 54% for vehicle financing last month, a substantial number of loan applications were not accepted for processing and this was not added to the loan submission statistics.

PROTON CAR DEALERS SEEK CLARIFICATION

2012-02-25T16:38:00.000-08:00

THE STAR: 26 FEBRUARY 2012

PETALING JAYA: Proton car dealers have welcomed Bank Negara Malaysia's efforts to meet with banks to clarify its new guidelines for borrowers.

Proton Edar Dealers Association Malaysia (Peda) president Armin Baniaz Pahamin said the meeting on Friday followed concerns expressed that many banks were “overzealous” in interpreting the guidelines and had asked for more documentation.

As a result, sales have been “severely damaged” with only 30% of applicants able to secure financing for new Proton cars last month, said Armin.

“We support the guidelines but not the implementation by banks, especially the interpretation of affordability,” he said yesterday.

Since Jan 1, banks have put in place tighter guidelines for consumer loans, calculating loans based on net income rather than gross income. The maximum tenure for car loans is now capped at nine years.

On Wednesday, it was reported that the income of more than 4,500 sales advisers employed by the Proton dealers' network has been badly impacted.

It was claimed that they were unable to earn commission from sales after customers' loan applications were rejected due to the stringent requirements.

Bank Negara had met with industry players on Friday and assured them that the guidelines would not hamper access to financing.

“Bank Negara has written to financial institutions to ensure that consumers who have the ability and capacity to repay should continue to have access to such financing,” it said in a statement.

“While there have been some reduction in the total number of vehicle financing applications received between December 2011 and last month, due in part to the shorter working month, the approval rate for vehicle financing has remained stable at about 54% for January,” it noted.

In response, Armin said although the approval rate was 54% for vehicle financing last month, a substantial number of loan applications were not accepted for processing and this was not added to the loan submission statistics.

KENYATAAN AKHBAR PEDA: BANK NEGARA PERCAYA KRISIS INDUSTRI AUTOMOTIF ADALAH DISEBABKAN PELAKSANAAN GARIS PANDUAN OLEH INSTITUSI BANK

2012-02-24T20:42:00.003-08:00

PEDA PRESS RELEASE: BANK NEGARA BELIEVE THE CRISIS WAS DUE TO THE IMPLEMENTATION BY BANKS ON THE GUIDELINE

2012-02-24T20:36:00.000-08:00

BANK NEGARA PRESS RELEASE AFTER DIALOGUE WITH AUTOMOTIVE INDUSTRY

2012-02-24T20:30:00.001-08:00

Engagement with the Automotive Industry on the Implementation of the Guidelines on Responsible Financing

Bank Negara Malaysia held an engagement session with representatives from the automotive industry, represented by senior officials of Proton, Perodua, the Malaysian Automotive Association, Proton Edar Dealers Association and Perodua Dealers Association and DRB-HICOM today. The meeting provided a platform to discuss issues relating to the automotive industry arising from the implementation of the Guidelines on Responsible Financing (Guidelines) which took effect on 1 January 2012.

Bank Negara Malaysia reiterated the main intent of the Guidelines, which aim to promote prudent, responsible and transparent retail financing practices as well as to ensure that the household sector and credit market remains resilient. Bank Negara Malaysia emphasized that individuals and households must borrow within their means and that the Guidelines did not hamper access to financing by borrowers who could afford to repay their loans. Bank Negara Malaysia has written to financial institutions to ensure that consumers who have the ability and capacity to repay should continue to have access to such financing.

The meeting discussed various implementation issues which will be resolved with financial institutions, including documentation requirements for purposes of income verification. This will contribute towards more efficient procedures and processes for vehicle financing.

In the recent five years, the proportion of vehicle financing over total loans to household sector has averaged about 20%, the second highest after financing for residential properties. While there have been some reduction in the total number of vehicle financing applications received between December 2011 and January 2012, due in part to the shorter working month, the approval rate for vehicle financing has remained stable at about 54% for the month of January 2012.

DONT BEND CAR LOAN GUIDELINES TO PLEASE CAR DEALERS

2012-02-23T21:22:00.000-08:00

BANK Negara should not loosen its new car loan guidelines as suggested by the Proton Edar Dealers Association of Malaysia (Pedar).

According to news reports, Pedar claims that members’ income have been affected because, with the new guidelines, only 30% of potential car buyers managed to secure hire-purchase loans.

However, there are good reasons why the guidelines are needed and must continue to be implemented.

First, the Malaysian household debt service ratio reached 47.8% in 2010. This means that, on average, almost half of a household’s income goes to repaying debts.

After paying off the debts there is not much left to spend on food, transport, education, and emergencies. Should the breadwinner fall sick or lose his job, the family will find it hard to make ends meet and loan defaults may result.

Second, after housing loans, car loans constitute the next largest category of the household debt.
The Insolvency Department announced last year that an average of 41 people were declared bankrupt every day, the biggest cause (26%) being hire-purchase loans.

There are also the social consequences for families: stress, depression, mental problems, suicides and family break-ups.
S.M. MOHAMED IDRIS,
President,
Consumers Association of Penang.

CONFUSION OVER THE NEW LENDING GUIDELINES

2012-02-23T14:39:00.001-08:00

The Sun Daily Newspaper.

PETALING JAYA (Feb 24, 2012): How do banks assess a car loan application? This question is being asked by prospective buyers, dealers and carmakers as they see red over the surge in rejected loan applications since January.

Last November, Bank Negara Malaysia (BNM) had unveiled new financial guidelines to financial institutions aimed at promoting prudent, responsible and transparent retail financing practices.

The guidelines, which came into effect Jan 1, stipulate that consumer loans be calculated based on a borrower's net income after statutory deductions for tax, contribution to the Employees Provident Fund (EPF) and all other debt obligations, rather than gross income, and the maximum tenure for car loans is now capped at nine years.

However, dealers and carmakers are lamenting that the new guidelines have resulted in confusion as the banks interpret the guidelines differently and the method of computation differs from lender to lender.

"For banks with high non-performing loans, their requirements will obviously be more stringent than the minimum required by the central bank. Thus, the amount of risk a bank takes on differs," a bank executive told SunBiz.

According to Proton Edar Dealers Association Malaysia (Peda) president Armin Baniaz Pahamin, the new rule of thumb, especially for Proton car buyers, includes some unwritten conditions such as the borrower's gross income must be at least RM1,600 per month or his/her net income (less EPF and any other loan exposure with banks) must be at least RM800.

"The borrower will also need to provide six months of bank statements and salary slips, the latter especially for applicants with high 'variable income'," said Armin in a recent statement.

"There is now no discretionary approval. Any application that does not conform to the Debt Service Ratio (DSR) of the BNM Guidelines is rejected without processing. Since the implementation of the guidelines, banks do not seem to have any flexibility in approving loans," said Armin, adding that this directly impacts the majority of national car buyers' demographic.

He had said that the new guidelines, which are now deemed a minimum standard of compliance, have badly impacted the local auto industry, with only 30% loan approval rate in January for new Proton car sales.

"How do banks assess the income of a self-employed?" asked a Perodua sales outlet manager.
He said the rejection rate for loan applications for new Perodua cars has increased from an average 20% last December to as high as 50% in January from its panel of banks, adding that sales of the ViVa model is the most affected by the new guidelines, where the loan rejection rate has increased from 21% in December to 32% in January.

The main buyers of the ViVA, an entry-level car, are new executives, young families, civil servants, the self-employed or people upgrading from a two-wheeler to a car.

"Perodua dealers or sales advisers from Kelantan, Kedah, Terengganu, Sabah and Sarawak have been the worst hit because there are more lower-income people there.

"The new guidelines are very rigid and it is taking banks a longer time to process the loans because they are going through them more thoroughly," he added. Previously, it was reported that approval only took two to five working days.

Nevertheless, these questions are expected to be raised by auto players including Proton Holdings Bhd, Perusahaan Otomobil Kedua Sdn Bhd (Perodua) and the Malaysian Automotive Association that are expected to meet BNM today to discuss the new lending guidelines, which had been partly blamed for the sharp 25% drop in new car sales in January to 40,948 units from 54,781 units a year ago.

PEDA MAHU BENTUK GABUNGAN BANTAH GARIS PANDUAN BNM

2012-02-21T18:40:00.001-08:00

(click on picture to enlarge)

UTUSAN MALAYSIA. KUALA LUMPUR 21 Feb. – Kerajaan didesak supaya meneliti semula pelaksanaan Garis Panduan Amalan Pembiayaan Yang Baik oleh Bank Negara Malaysia (BNM) kerana didakwa bakal membunuh industri automotif tempatan.

Presiden Persatuan Pengedar Proton Edar Malaysia (Peda), Armin Baniaz Pahamin (gambar) berkata, pihaknya akan bergabung tenaga dengan semua pengedar dan vendor Proton, Perodua dan Naza Kia untuk membentuk satu gabungan dalam memperjuangkan isu tersebut.

Beliau berkata, Peda begitu serius dalam menentang pelaksanaan garis panduan itu terutama dalam industri automotif kerana ia telah menjejaskan seluruh ekosistem sektor tersebut.

Malah, katanya, penguatkuasaan garis panduan itu juga tidak selari dengan agenda kerajaan dalam membangunkan industri tersebut yang bakal menyumbang kepada Keluaran Dalam Negara Kasar.

Bukan itu sahaja, bahkan pelaksanaan garis panduan tersebut juga bertentangan dengan Rancangan Malaysia Kesepuluh untuk membangunkan industri automotif negara.

‘‘Kita tidak payah bercakap pasal industri automotif kalau pelaksanaan garis panduan ini diteruskan.

‘‘Lebih baik industri automotif yang dibangunkan ditutup sahaja,’’ kata beliau dalam nada yang keras kepada Utusan Malaysia di sini.

Beliau berkata, Peda sudah pun memberi surat bantahan rasmi kepada BNM berhubung pelaksanaan garis panduan itu dan pertemuan dengan Bank Pusat itu dijangka berlangsung pada Jumaat ini.

Armin berkata, pihaknya akan mengemukakan surat yang sama kepada Perdana Menteri, Datuk Seri Najib Tun Razak dan Kementerian Kewangan supaya rintihan industri automotif negara diberi perhatian sewajarnya.

Mengulas lanjut, Armin berkata, Peda wajar mempersoalkan penguatkuasaan garis panduan itu kerana industri tersebut memang bergantung sepenuhnya kepada pasaran domestik.

Tegas beliau, Malaysia bukan seperti Thailand yang mengeluarkan kereta kira-kira dua juta setahun untuk tujuan domestik dan luar negara.

‘‘Macam Proton hanya menghasilkan sebanyak 30,000 setahun, jual dalam 25,000, bukan besar pun. Itu belum dikira jangka hayat penggunaan kereta di Malaysia antara 10 hingga 15 tahun.

‘‘Dengan cabaran-cabaran lain yang perlu dihadapi oleh industri automotif, pelaksanaan garis panduan oleh BNM memang menambah ancaman kepada skala ekonomi sektor ini.

‘‘Industri automotif tempatan seperti Proton dan Perodua tidak boleh bergantung kepada eksport, pelaburannya terlalu besar.

‘‘Tetapi, kalau di negara sendiri pun sukar ‘hidup’ dengan pelbagai peraturan, lebih baik tutup sahaja industri ini,’’ tegasnya.

Dalam pada itu, Armin menjangkakan unjuran jualan kereta pada bulan Januari 2012 sebenarnya lebih teruk daripada yang diumumkan oleh Persatuan Automotif Malaysia (MAA) semalam.

Dakwanya, jumlah yang dilaporkan oleh MAA itu telah mengambil kira jumlah tempahan yang dibuat pada Disember tahun lalu.

‘‘Kalau ditolak dengan tempahan bulan lalu, sudah pasti jumlah Januari lebih buruk,’’ katanya.

Jelas beliau, jangkaan itu berdasarkan pengalamannya sendiri yang melakukan proses permohonan membeli kereta baharu bagi para pelanggannya.

Daripada 10 borang yang dikemukakan kepada pihak bank, tujuh borang akan ditolak sebelum atau selepas permohonan.

BNM GUIDELINES HURT SALES

2012-02-21T17:36:00.000-08:00

PROTON DEALERS WANT LOAN GUIDELINE REVIEW

2012-02-21T17:14:00.000-08:00

BANK NEGARA GUIDELINES ON RESPONSIBLE FINANCE (BNM/RH/GL 000-5)

2012-02-21T04:19:00.000-08:00

The impact from BNM latest guideline on lending policy from PEDA's perspective can be viewed HERE.

GUIDELINES ON RESPONSIBLE FINANCE

UTUSAN MALAYSIA: HENTIKAN DERITA PENGEDAR

2012-01-30T20:33:00.000-08:00

Peda: Hentikan derita pengedar

Oleh WAN NAJIB WAN DAUD
bisnes@utusan.com.my

KUALA LUMPUR 29 Jan. - Persatuan Pengedar Proton Edar Malaysia (Peda), berharap pengambilan alih Proton Holdings Bhd. (Proton) oleh DRB-HICOM Bhd. mampu memulihkan kembali penguasaan kereta nasional dalam pasaran negara ini.

Presiden Peda, Armin Baniaz Pahamin berkata, pihaknya kini menunggu rangka strategi baharu yang akan diwujudkan oleh pemilik baru Proton dalam merampas kembali kedudukan nombor satu yang kini dipegang oleh Perodua.

Sambil menyatakan kesediaan PEDA untuk bekerjasama, Armin Baniaz percaya, kelebihan yang ada pada DRB-HICOM mampu membolehkan membolehkan Proton kembali bersaing dengan jenama lain.

"Sebagai pemilik baru, pemilik baharunya perlu berani untuk mengeluarkan model-model baru Proton selain lebih agresif di pasaran antarabangsa untuk menyaingi jenama-jenama lain di pasaran,'' kata beliau.

Peda yang mewakili 80 peratus rangkaian pengedar Proton di seluruh negara berharap DRB-HICOM dapat menetap hala tuju serta perjalanan baharu pengeluar kereta nasional itu supaya tidak terjadi sebagaimana sebelum ini.

Sebagai contoh Armin Baniaz berkata, pertukaran tujuh kali Ketua Pegawai Eksekutif Proton Edar telah mendatangkan kesulitan kepada ahli-ahli Peda termasuk pengenaan dasar-dasar yang dianggap tidak masuk akal.

Selain itu, Peda terpaksa berdepan dengan rungutan pembeli berikutan kualiti yang rendah serta penerimaan negatif masyarakat terhadap kereta Proton sehingga pernah mengakibatkan pengeluar kereta nasional itu menanggung stok sebanyak 50,000 buah kereta yang gagal untuk dijual.

"Kami berdepan dengan pelbagai masalah berikutan tekanan yang diberikan kepada Proton Edar untuk menjual produk sedangkan pembeli tidak dapat menerima produk berkenaan kerana kualiti yang rendah dan persepsi negatif terhadap jenama itu,'' katanya.

Armin Baniaz berkata, selain daripada faktor itu, pengedar Proton turut menderita akibat perkongsian pasaran edaran yang terlalu kecil selain kebanjiran kereta-kereta import yang diisytihar bawah nilai.

Berikutan itu, beliau berharap DRB-HICOM dapat memberi tumpuan dan mengembalikan semula kegemilangan Proton untuk menjadi jenama nombor satu di Malaysia.

BANK PERKETAT LULUS PINJAMAN

2012-01-17T22:29:00.000-08:00

Bank perketat lulus pinjaman

PERSATUAN Pengedar Proton Edar (Peda) menjangkakan 2012 akan menjadi tahun yang sukar membabitkan jualan keseluruhan Proton berikutan institusi perbankan memperketatkan kadar kelulusan bagi pembeli kenderaan itu.

Presidennya, Armin Baniaz Pahamin berkata, jaringan wakil penjual Peda kini berdepan kadar penolakan serius dengan kebanyakan bank enggan menerima permohonan belian daripada pelanggan yang tidak mempunyai gaji purata bulanan RM1,800 ke atas.

“Lebih 70 peratus daripada permohonan belian ditolak. Malah, graduan yang baru tamat pengajian dan mempunyai pendapatan purata RM2,000 sebulan turut dikehendaki mengemukakan penjamin untuk membuat pembelian.
“Situasi ini tentunya akan memberi impak besar terhadap jualan kenderaan Proton bagi tahun ini,” katanya ketika dihubungi di Kuala Lumpur, semalam.

Mengulas pengambilalihan 42.74 peratus kepentingan dalam Proton Holdings Bhd oleh DRB-Hicom Bhd, beliau berkata, pihaknya berharap tiada perubahan polisi dalaman kerana ia akan menjejaskan wakil penjual secara langsung.

“Kami mengerti dengan keperluan Proton untuk mendapatkan suntikan modal baru bagi membolehkannya lebih kompetitif,” katanya.

PROTON WILL REMAIN NATIONAL CAR MAKER

2012-01-17T13:16:00.001-08:00

PEDA hopes DRB-HICOM continues policies

2012-01-16T15:45:00.000-08:00

The Proton Edar Dealers Association Malaysia (PEDA) today extended its support to DRB-HICOM, saying it looks forward to working more closely with the new owner.

In a statement today, the association said it understands Proton's need for
a fresh capital injection in order to be competitive especially with the
impending liberalisation of the auto market.

DRB-HICOM's stronger cashflow would enable Proton to introduce newer models more regularly and to be more aggressive in export, the association said.

However, PEDA, being the official representative for the authorised sales
and service network in Malaysia with more than 80 per cent of Proton's domestic sales, is concerned for the welfare of its network.

"There should be a continuity in policies and strategic direction. The
dealers have gone through various policy changes, from Proton's first owner to
the current one," its president Armin Baniaz Pahamin said.

He added Proton's current management under the stewardship of managing
director Datuk Seri Syed Zainal Abidin Syed Tahir inherited Proton the year it
lost its crown as Malaysia's number 1 carmaker and inherited critical issues
from unsold stocks, poor quality, failed marketing and negative public
acceptance.

Proton's quality, he said, is now at par with if not better than its
competitors, with a healthy level of unsold stocks.

PEDA said Syed Zainal's team is more customer-sensitive, adding it trusts
the DRB-HICOM management would be sensitive to the historical support extended by the dealer network to Proton and move forward without any detrimental policy introduced to the dealers.

PEDA, which views Proton's overall 2012 sales as tougher than before, said
any changes in internal policy would affect the dealers. -- Bernama

Mail Q&A: Raising the red flag

2011-06-29T22:07:00.000-07:00

Amendments to Hire Purchase Act will 'kill' automotive industry, says association

MARHALIM ABAS

Wednesday, June 29th, 2011 12:33:00

THE Proton Edar Dealers Association Malaysia (PEDA) is calling for the deferment of the amendments to the Hire Purchase Act 1967, claiming it is not pragmatic and may halt the growth of the automotive industry.

Dealers may even go bankrupt and it is the banks who are having the final say on the sale of cars.
The Malay Mail's senior writer MARHALIM ABAS spoke to its president Armin Baniaz Pahamin (pic), who says if the government does not step in and put a halt to the amendments, the automotive industry would suffer tremendously.

There is also no proper understanding on the nature of the amendments and it is leaving everyone from the banks to dealers in a quandary.

Q: What is wrong with the amendments to the Act? Have you got the numbers to back your claims?

A: Since it only came into force recently (June 15), the full impact of the amendments has yet to be seen throughout the network. However, I can say the booking for Proton cars has gone down by 50 per cent.
The impact can also be seen during a sales carnival by a dealer who specialised in reconditioned cars and at the Perodua launching of the new Myvi. We can see customers eager to place booking for particular cars but the salesman and the dealer cannot make the booking. The waiting list only starts when the money is paid, so you see that the first process has been lost as under the amendments you cannot take booking until the loan was approved.
So, whatever that is done by the dealer will only be taken into consideration when all official documentation is received and the loan approved.

Q: So, only when the loan is approved can the sale be considered safe?

A: Yes, only then the sale numbers materialise in the system. And we also cannot complete the documentation for the hire purchase agreement until the car we ordered arrives as under the new amendments, we cannot issue out blank documents. We then need to fill up every detail about the vehicle and its purchase before it can be sent to the bank for the hire purchase agreement. It is only then the purchaser needs to pay the full downpayment.

Q: Can't a verbal agreement be seen as a contract?

A: Under the sales contract, there is the buyer, seller and consideration, which is the money paid. When there is no money paid, there is no contract. You need the money for the contract to materialise.

Q: Can you take us through what kind of problems your member will face now?

A: Let’s say one has 10 customers... customer A, B, C, D, E and so on. They submit their documents to di fferent banks and due to di fferent processes, customer E gets his Letter of Undertaking first, meaning he will get the car first. So, there is no queuing under the new system.
If the dealer has a sales promotion over a weekend, customers may lose out what was o ffered during that period. Before, as long as your booking was made during that particular period, we key-in the particulars over the system so even if the loan approval came much later the customer will still get what was promised during the period.

Now, of course, we cannot make the booking as under the Act, we are not supposed to do it. Yet, that is not the main problem. Seventy per cent of our customers are those who want to trade their cars. Now, cars need to be inspected at Puspakom. Each car needs to be inspected and its faults documented, in a detail form. Before, you just need to look at the car or maybe test drive it before making the purchase.
Even before the new amendments came into force, used car dealers slashed the prices of second hand cars up to RM10,000. The used car dealers slashed the prices because they fear they cannot sell the vehicles.

Q: Is the problem exclusive to PEDA members?

A: It is across the industry. After we issued the Press statement, Perodua dealers association contacted us so we could meet with the government in order for us to discuss to postpone or defer the amendments.
PEDA represents 80 per cent of Proton dealers in the country while the Perodua association also represent 80 per cent of their segment. Together, we make up 60 per cent of the total market share.
The amendments do not specify whether it focuses on the national car segment or not. It is general and it covers all vehicles not just cars, van, motorcycle or trucks. The impact is more unique to the automotive industry and more unique for the national car segment.
You know every time, a new car is introduced, be it low or high season, the speculation by the general public and used car dealers remain high. In the past, when the booking fees were RM1,000 or RM5,000, they could make bookings for 20 cars. If you cannot accurately gauge the actual booking, how can you commit to the factory? How can you make forecast to Proton?
Our business is unique as it’s a bulk sale. In the past, if we make a forecast of 50 cars, we can easily con firm as booking fees are made. Now it is all to the banks. If the o fficer can complete the documentation in 24 hours, we will know whether the customer is approved or not the next day. But some banks take two or three weeks to process loans documentation. It will be two weeks before we get the Letter of Undertaking and other documents.

Q: Since the amendments have been enforced, which forbids salesmen and dealers from collecting booking fees without the loan approval, have you heard of instances of anyone being arrested during the last five days?

A: Yes. Two cases so far, one up north and another in Kuala Lumpur, when a reconditioned car dealer held a sales carnival over the weekend. The dealer collected a lot of booking fees, not knowing they cannot do so. I was told an enforcement o fficer from the Domestic Trade, Cooperatives and Consumerism Ministry had posed as a customer and paid the booking fee. The dealer was subsequently arrested. The ministry said they will give a grace period of six months before coming down hard on errant salesmen and dealers.

Previously, the fines were between RM1,000 and RM3,000. Now, for the first o ffence for companies, the penalty is RM100,000 and for the second o ffence, it is RM250,000. So, just imagine if a dealership collects a booking fee of RM1,000, for example, for a Persona and the loan has not been approved, it can be fined RM100,000. Furthermore, under the law, the booking fee is
only one per cent of the car price, so the dealership has already committed a second offence which makes it liable to be fined RM250,000.

Q: Was PEDA purview to the amendments? Were the other stakeholders aware of the consequences?

A: Until the Act was gazetted, even banks were not aware. The banks only came to know about the amendment after it was gazetted. The amendments had gone through drafting and tabling in Parliament without prior discussions with stakeholders.

Q: What’s the solution then?

A: First of all, we hope the enforcement of the amendments are deferred and postponed and the government will meet with the stakeholders on how to minimise the impact. We have met with the Association of Banks Malaysia, Association of Islamic Banks Malaysia and individual banks. Everybody is confused. If you follow the amendments, the banks as the bene ficial owners must be the one collecting the booking fee and downpayments. Now, we have to totally depend on the already overworked marketing o fficers.

Even before the amendments came into e ffect, it was hard to catch marketing o fficers for various reasons. Now, it appears we cannot even do business.

Q: Based on what you are saying, it appears the banks are now the de-facto car dealer.

A: Yes it’s the banks, not the car dealers. When we bring customers up to the marketing o fficer to ensure the deal happens, we no longer need to work diligently as it will all depend on the marketing officers.

To make matters worse, every bank has its standard operating procedure (SOP). Today, if a marketing o fficer from one bank come to us, he or she will brief us on their SOP. Tomorrow, another officer from another bank will tell us another SOP. If the banks cannot synchronise their SOPs, how can the 250 Proton Edar dealers be homogenous on the same amendments? Everyone has their own SOPs at the moment. Even the ministry o fficials are confused. How do you expect the industry and the general public to understand the amendments?

Therefore, we strongly believe the enforcement should be postponed until everyone in the industry understand the nature of the amendments so we can explain it to our customers.

Q: What’s the time frame for the deferment?

A: Until everyone understands the amendment. The government is saying they support entrepreneurs but they keep introducing policies which are stifling entrepreneurship. If this goes on, half of the 5,000 used car dealers will close shop.

For example, on the first day the amendments came into force, RHB Bank stopped credit facilities to our members. Forecast for the sales can only be done at the end of the month.

Q: Apart from the Domestic Trade Ministry, are you sending the memorandum to anyone else?

A: Since the ministry has purview over the Act, we are going to them first. We will also be meeting with our advisor Tun Dr Mahathir (Mohamad) and Prime Minister Datuk Seri Najib Razak, who is also the Finance Minister.

Q: Will car dealers gulung tikar (go bankrupt) within one or two months if your deferment application is not met?

A: I don’t want to be that dramatic as I am aware of the possible reaction, but I will say this. The automotive industry is the second largest industry in the Malaysian economy after properties. Any repercussion on the automotive industry will have a very huge impact on the national economy.

Q: Why is this happening to the automotive industry since, as you say, it’s one of the economy's most important sectors?

A: This sounds a little bit harsh but I hope it will be published. Personally speaking, I do not know where the government is heading with the automotive industry. None of the industry stakeholders were consulted before new policies are introduced.

With the amount of revenue and taxes generated by the industry from excise duties to road duties, how much percentage of the revenue is ploughed back into the industry? The answer is negligible and at the same time, the government never refer to stakeholders on new policies.

For example, when they launched the National Automotive Policy a few years back, car prices for both new and used cars decreased overnight. The government says they want entrepreneurship to prosper but at the same time, they implement policies which have adverse impact on the very group they say they want to develop and see prosper.

Industri kereta terpakai dijangka rugi RM3 bilion

2011-06-21T08:43:00.000-07:00

Industri kereta terpakai dijangka rugi RM3 bilion

PERSEKUTUAN Persatuan Syarikat Motor dan Kredit Malaysia (FMCCAM) berpendapat industri kereta terpakai tempatan dijangka mengalami kerugian sehingga RM3 bilion iaitu kira-kira 20 peratus daripada RM15 bilion nilai pasaran industri tahun ini ekoran pindaan Akta Sewa Beli 1967 (pindaan 2010) yang dilaksanakan Jun lalu.

Presidennya, Datuk Tony C B Khor, berkata antara lain pindaan itu membolehkan pembeli melunaskan pembayaran pendahuluan selepas pinjaman bank diluluskan dan ia dikatakan amat ketat serta membebankan penjual.

“Urusan jual beli kereta akan melalui pelbagai proses dokumentasi yang menelan masa dan kos. Pembeli yang berubah fikiran kini berhak membatalkan pembelian bila-bila masa sedangkan kami sudah melakukan proses pinjaman dan pertukaran hak milik. Jika ini berlaku, siapa yang akan menanggung semua kerugian ini? “Ia secara tidak langsung menyebabkan ramai penjual kereta terpakai bimbang dengan pindaan akta yang dilihat hanya menyebelahi satu pihak saja,” katanya pada sidang media sempena majlis menandatangani perjanjian kerjasama antara eAuto Sdn Bhd dengan FMCCC di Genting Highlands, semalam.
Tony berkata, jualan kereta terpakai mencecah 40,000 hingga 50,000 kereta sebulan, kira-kira 450,000 hingga 500,000 setahun dengan nilai jualan RM15 bilion.

Sementara itu, Persatuan Pengedar Proton Edar Malaysia (Peda) meminta kerajaan menangguhkan sepenuhnya pelaksanaan pindaan Akta Sewa Beli 1967 bagi mengurangkan kesan negatif kepada industri automotif di negara ini.

Presidennya, Armin Baniaz Datuk Pahamin, berkata pindaan itu yang sudah diwartakan tanpa perbincangan awal dengan pihak industri perlu dikaji semula.

“Pindaan Akta Sewa Beli itu yang berkuat kuasa Khamis lalu difahamkan tidak pragmatik dan boleh menghentikan pertumbuhan industri automotif dan permintaan itu dibuat kerana pengedar kenderaan akan menghadapi masalah aliran tunai yang serius disebabkan wang tempahan dan deposit perlu dijelaskan terlebih dulu kepada bank.

“Ini bagi memastikan jumlah kutipan wang sama jumlahnya dengan harga kereta di atas jalan (OTR) sebelum pihak bank membenarkan pengeluaran bayaran dikeluarkan kepada pengedar,” katanya.

Proton dealers ask govt to defer new Hire Purchase Act

2011-06-17T20:19:00.000-07:00

Proton dealers ask govt to defer new Hire Purchase Act

News

2011-06-18 10:57

KUALA LUMPUR, June 17 (Bernama) -- The Proton Edar Dealers Association Malaysia (PEDA) has asked the government to defer the implementation of amendments to the Hire Purchase Act 1967.

Its president, Armin Baniaz Datuk Pahamin, said the postponement was to facilitate a review of the new law which, he said, had been gazetted without prior consultation with the industry.

In a statement today, he said the amendments which took effect yesterday were considered not pragmatic and could potentially stall the growth of automotive industry.

He said vehicle dealers would be facing serious cash flow problems if they had to hand over booking fees and deposits to the bank first. Besides, the price of used cars would also be affected when costs also increased with more stringent sale and purchase requirements, he said.

"About 70 per cent of new vehicle sales depend on trade in. With this, the market for new cars is also expected to be affected," he said.

PEDA chief says HPA amendments not pragmatic

2011-06-17T20:11:00.000-07:00

By THOMAS HUONG and EUGENE MAHALINGAM

starbiz@thestar.com.my

PETALING JAYA: Proton Edar Dealers Association Malaysia (PEDA) has hit out against the amendments to the Hire-Purchase Act 1967 (HPA).

Under the amendments, effective June 15, all used vehicles for sale will undergo Puspakom's 18-point inspection to ensure their roadworthiness.

Another issue of contention was the 1% maximum booking fee mandated by the amended Act, which requires used-car dealers to refund customers 90% of the booking fee if the deal falls through.
The amendments, among others, also entail the need to obtain a court order before repossessing a vehicle and repossessors must be appointed by the Government and be issued written permits.
PEDA president Armin Baniaz Pahamin said the amendments were not pragmatic and might halt the growth of the automotive industry

“The implementation of the amendments that were gazetted without prior discussion with automotive stakeholders should be deferred indefinitely, re-visited and reviewed together with all stake-holders to ensure minimal effect on the industry's growth,” he said in a statement yesterday.

Armin said PEDA was ready to work with the Government to achieve the objectives of the amendments, as it felt that the Act was intended to protect the interests of used-vehicle buyers, with minimal impact to the industry.

With the implementation of the amendments to the HPA, a buyer would only be required to pay a booking fee after the hire purchase loan was approved, which averaged around three days from point of submission, said PEDA in a statement yesterday.

“With an average of three days before the actual payment for a booking fee, customers may miss out promotions by the time it (the loan) is approved,” it said.

Federation of Motor and Credit Companies Association of Malaysia (FMCCAM) president Datuk Tony Khor said the amended HPA was creating a lot of confusion.
He said the new 18-point inspection by Puspakom was unnecessary.
“The current (four-point inspection) inspection is sufficient to ensure customer safety. The amended (18-point inspection) will only incur additional charges.”
Khor also said it did not make sense to pay the booking fee only after the loan was approved. “How to order the vehicle without paying a deposit? No way!”
He added that FMCCAM had submitted a memorandum to the Government to address the amendments to the HPA.

“The (amended) HPA is only two days old but it is already creating so much of confusion. We will be having discussions with the Government and hope to have the matter resolved soon.”
Federation of Malaysian Consumer Associations secretary-general Muhammad Shaani Abdullah said he was supportive of the additional (18-point inspection) procedure.
“The need to protect buyers should be there,” he said.

Amended hire purchase act not pragmatic, may halt growth: Peda

2011-06-17T16:49:00.000-07:00

KUALA LUMPUR: The amended hire purchase act is not pragmatic and may halt the growth of the automotive industry, Proton Edar Dealers Association (Peda) says.

Peda president Armin Baniaz Pahamin claimed that the Hire Purchase Act (2010 Amendments), which came into force yesterday, has been gazetted without prior discussion with automotive stakeholders.

He urged the government to review the amended Act to ensure there is minimal impact on the industry's growth.

"Peda and other stakeholders are aware of the objective and spirit (of the amended act) and is ready to work with the government to achieve the objective with minimal impact to the industry," Armin said in a statement yesterday.

The amended Act aims to protect customers from losing their booking and deposits paid to unscrupulous sales advisers and car dealers, among others.

Under the amended Act, Peda noted that buyers will only need to pay booking fees after being served with the duly completed Schedule 2.

However, banks will only issue Schedule 2 after the hire purchase loan has been approved and that would presently average about three days from the point of submission.

“With an average of three days before the actual payment for a booking fees, customers may miss and be deprived to secure a promotion when the promotion ended before the booking fees is paid/loan approved. Booking for a car is not secured until the booking fees is paid,” it explained.

Peda said delivery of cars will now take an additional seven days more from normal practice due to lengthy documentation period and unavailability of bank officers to deposit cheques or monies to be collected from the eventual car owner.

“Payment for car down payment can only be collected by banks or its authorised personnel. Currently, majority of banks do not allow car dealers to collect monies on the bank’s behalf except only AmBank,” it said.

Peda anticipates that car buyers would need to pay more visits to their car outlets and banks to sign documentations, which previously only needs a single visit to the car outlet after paying the booking fees.

Armin said dealers will face serious cash flow problem because the booking and deposit must be first paid to the bank to equate the vehicle "on the road" price before the bank is allowed to disburse out to the car dealer.

Bank facilities such as Payment Before Registration (PBR) that almost all dealers subscribe too are also frozen and suspended since the amended Act was implemented, he added.

Used car prices will also be affected because the amended Act has made it costlier and more restrictive for second-hand car trader to buy and sell cars.

“With 70 per cent of new car sales depends trade-in vehicles, the new car sale is also expected to be adversely affected,” Armin said.

“With a suspended bank facility, less working capital, more stringent requirement for hire-purchase loan approval and tougher trade-in cars to buy new vehicle, the overall national automotive growth is expected to be affected,” he added.

Proton Dealers Ask Government To Defer New Hire Purchase Act

2011-06-17T06:17:00.000-07:00

Proton Dealers Ask Government To Defer New Hire Purchase Act

KUALA LUMPUR, June 17 (Bernama) -- The Proton Edar Dealers Association Malaysia (PEDA) has asked the government to defer the implementation of amendments to the Hire Purchase Act 1967.

Its president, Armin Baniaz Datuk Pahamin, said the postponement was to facilitate a review of the new law which, he said, had been gazetted without prior consultation with the industry.

In a statement, he said the amendments which took effect yesterday were considered not pragmatic and could potentially stall the growth of automotive industry.

He said vehicle dealers would be facing serious cash flow problems if they had to hand over booking fees and deposits to the bank first.

Besides, the price of used cars would also be affected when costs also increased with more stringent sale and purchase requirements, he said.

"About 70 per cent of new vehicle sales depend on trade in. With this, the market for new cars is also expected to be affected," he said.

-- BERNAMA

PEDA Minta Pelaksanaan Pindaan Akta Sewa Beli Ditangguh

2011-06-17T06:15:00.000-07:00

PEDA Minta Pelaksanaan Pindaan Akta Sewa Beli Ditangguh

KUALA LUMPUR, 17 Jun (Bernama) -- Persatuan Pengedar Proton Edar Malaysia (Peda) Jumaat meminta kerajaan menangguhkan sepenuhnya pelaksanaan pindaan Akta Sewa Beli 1967 bagi mengurangkan kesan negatif kepada industri itu di Malaysia.

Presidennya, Armin Baniaz Datuk Pahamin berkata, pindaan itu, yang telah diwartakan tanpa perbincangan awal dengan pihak industri, juga perlu dikaji semula.

Dalam satu kenyataan di sini hari ini, beliau berkata, pindaan Akta Sewa Beli itu yang berkuat kuasa semalam difahamkan tidak pragmatik dan boleh menghentikan pertumbuhan industri automotif.

Antara lain, katanya permintaan itu dibuat kerana para pengedar kenderaan akan menghadapi masalah aliran tunai yang serius disebabkan wang tempahan dan deposit perlu dijelaskan terlebih dahulu kepada bank.

Ini bagi memastikan jumlah kutipan wang adalah sama jumlahnya dengan harga kereta di atas jalan (OTR) sebelum pihak bank membenarkan pengeluaran bayaran dikeluarkan kepada pengedar.

Katanya pengedar juga akan kekurangan pembayaran pendahulan sebagai modal untuk membayar kereta yang ditempah oleh pelanggan.

Selain itu, harga kereta terpakai juga turut terjejas apabila kos turut meningkat dengan syarat-syarat yang lebih ketat untuk membeli dan menjual kereta, katanya.

"Sebanyak 70 peratus jualan kenderaan baru adalah bergantung kepada kereta tukar beli. Dengan ini, pasaran kereta baru dijangka turut terjejas," katanya.

Peda dan pihak lain dari industri memahami matlamat dan objektif kerajaan, dan bersedia untuk bekerjasama dengan pihak kementerian untuk mencapai matlamat tersebut dengan impak yang minimum.

-- BERNAMA

BUNG RESPONDED TO PRESIDENT PEDA

2010-10-22T02:44:00.000-07:00

Bung: No 'evolution' in Proton

Submitted by Najiah on Friday, October 22nd, 2010

Joseph Kaos Jr

Friday, October 22nd, 2010 12:54:00

KUALA LUMPUR: Kinabatangan MP Datuk Bung Mokhtar Radin (pic) challenged dealers of national car Proton to prove him wrong by showing they can win the hearts of the rakyat with its much-talked about upcoming model, the Inspira.
Bung Mokhtar was responding to a statement by Proton Edar Dealers’ Association Malaysia (Peda) yesterday, which accused him of being “naive” and “insensitive” when criticising the Inspira in the Dewan Rakyat recently.
“I can’t stop them from feeling upset over the statements over the Inspira and it’s entirely up to them if they want to express their displeasure,” he told The Malay Mail at the 2010 Umno General Assembly at Putra World Trade Center here this morning.
“They must prove me wrong. Show that they are able to convince the rakyat to buy the Inspira,” said Bung Mokhtar, who is also deputy chairman of the Barisan Nasional (BN) Backbenchers’ Club.

“Justify why the money is better spent on producing a carbon copy of another car model.”
Bung Mokhtar said he never intended to hurt the feelings of the dealers or make them feel insignificant with his statement.

“My statement had nothing to do with the dealers in the first place. In my speech, I was questioning the capabilities of Proton, who have been assigned by the government to spearhead the local automotive industry.”

Bung Mokhtar said as an elected representative, it was his duty to serve the interest of the nation and the rakyat.

“I’m doing national service here,” said the Umno Supreme Council member. “I’m voicing out the opinions of the rakyat, who told me they were disappointed with Proton’s move to produce a carbon copy of the Mitsubishi Lancer.

“The rakyat felt that Proton by now should be able to produce its own unique models. They can do this before. Why are we suddenly making imitations of a car from a different make? They feel this is a step backwards by Proton.”

Bung Mokhtar said several Mitsubishi Lancer owners have since contacted him and congratulated him for his statements on the Proton Inspira.

“The owners said they feel insulted to know that people will be driving a “semi-Lancer” on the roads.”
On Monday, when debating the 2011 Budget, Bung Mokhtar said Proton had embarrassed the nation by producing the Proton Inspira, which he said is a duplicate of the Mitsubishi Lancer.

He rubbished Proton’s reasoning that it was too costly to design its own model to replace the Proton Waja and suggested that the national car maker should just wind up.

SEE: MALAY MAIL 22 OCTOBER 2010

.

PEDA DEFENDS PROTON'S MOVE TO LAUNCH INSPIRA

2010-10-21T16:52:00.000-07:00

BUSINESS TIMES 22 OCTOBER 2010.

PROTON Edar Dealers' Association Malaysia (Peda) has defended Proton Holdings Bhd's (5304) move to introduce Proton Inspira, saying the sedan helps create a new segment for the national carmaker.

"Proton Inspira created a new market for Proton to penetrate, a market that is currently being dominated by the Korean and other Japanese carmakes," Peda president Armin Baniaz Pahamin Armin said in a statement.

He was responding to the statement made by BackBenchers' Club deputy chairman Datuk Bung Mokhtar Radin.

Bung Mokhtar early this week said Proton should be wound up for "embarrassing the nation by producing a re-badged Mitsubishi Lancer as Proton Inspira".
"The remark made by Bung Mokhtar was naive and insensitive without a clear understanding on the automotive industry.

"With only an expected production capacity of 1,000 Inspiras per month on a total monthly production of 15,000 Protons, it is not worth spending RM700 million for such a small niche market although Proton has the capabilities to do so from the years of investment in research and development infrastructure," Armin said.

He added that any investment should be geared and channelled towards producing a bread-winning model for the mass public with an engine capacity of 1.3cc to 1.6cc.

Armin noted that such collaboration between Proton and Mitsubishi is common among global carmakers.

"The Mitsubishi Lancer is not a phase-out model that has passed its lifecycle. It has only been in the market for three years since 2007," he remarked.

The Inspira, he said, also provides a platform for existing Proton owners to upgrade their vehicles from the current Proton Waja, Proton Persona and Gen2. This was a segment that was never represented by Proton and further left vacant when Proton Perdana was discontinued.