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Auto sector fights to save jobs but some bureaucrats face other challenges

POSTED BY Sri Fitrah Vong ON 20 April 2020

#yaminvong

Managers in the automotive sector are strategising ways to hit the ground running as soon as the Movement Control Order (MCO) is lifted but they’ve been hamstrung by some bureaucrats who don’t share the urgency of saving jobs in the face of the COVID-19 pandemic.

Of immediate concern to the auto sector is that the multi-ministry Automotive Business Development Committee which decides on auto sector investments and incentives hasn’t met for the past two fortnightly meetings.

However, the “good” news is that the first ABDC on-line meeting could start as early as next week.

“I’m discussing with the Ministry of International Trade and Industry about convening an ABDC meeting on-line by next week,” said Datuk Madani Sahari, the CEO of Malaysia Automotive, Robotics and IoT Institute, an agency under MITI. He was responding to my Whatsapp question.

The ABDC which consists of officials from MITI, MARii, Malaysia Industrial Development Authority, Ministry of Finance, and Customs was born during the Barisan Nasional era but many investors bypassed it and went directly to the MOF.

During the short-lived Pakatan Harapan days, then Finance Minister Lim Guan Eng revived the ABDC and his Deputy, Ong Kian Meng, restructured it to be a fortnightly meeting in response to the request by the Malaysian Automotive Association for faster turnaround on automotive business submissions.

 An auto industry participant was surprised by the inability of ABDC to convene on-line meetings. This premium auto group said that they had started on-line in-house meetings even before the MCO.

“Previously we used Skype. Then we moved to Zoom until we learnt of security issues. Now we’re using Microsoft Team and we just finished our weekly town-hall meeting of 60-70 people,” he said, responding to the postponement of two ABDC meetings.

“We’re affected because we will launch a new CKD model and we’re waiting for the approval for our submission on the CKD plan as well as number of CBU units to bridge the gap until the CKD model is ready for roll out,” he said, declining to be identified because he was not authorised to speak .

Another industry participant was not so phlegmatic about the delay in the approval process. “We need to hit the road as soon as the MCO is lifted. We have products to launch, business has to be back to normal as fast as possible.

“We’re planning to start a Completely Knocked Down (CKD) programme and in order to do that, we need to apply to the government for the number of CBU units we can import until the CKD equivalent is assembled and ready for sale.

“All these have to be decided at the ABDC level. So if everything is on hold, and my cars are already on the way, and if I’ve to wait another two months after MCO before I have approval to sell them, it’s a huge and unnecessary financial burden,” he said.

 “If it’s too difficult to convene all the members of the ABDC to meet, then why not have one ministry to lead. Since this is a Trade and Industry matter, I think MITI and MARii should lead. Even now, it’s a repetitive process because the ABDC makes a decision and reverts this to the MOF for endorsement. It’s a duplicative process,” he said.