Maylasia’s automotive manufacturers, suppliers and dealers will be badly affected by the global financial meltdown without support from the government and banks, the Proton Edar Dealers’ Association has said.
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The group also welcomed the return of Datuk Mohd Nadzmi Salleh to Proton Holdings as its new chairman.
“Proton will benefit from Datuk Nadzmi’s vast experience in the automotive industry, especially in sustaining our sales during (possible) recession for 2009,” Peda deputy president Armin Baniaz Pahamin said.
He said sufficient government support would help sustain industry sales, hence lessening the impact of the downturn.
“The automotive industry is unique as it is neither the seller’s market nor the buyer’s market. Instead, it is the banks that control the car sales via the vehicle financing,” he told the Business Times.
“A car with the best technology, design or pricing is still not saleable unless the dealers are able to secure the bank financing for the customer hire purchase loan,” he added.
“Banking facilities and hire-purchase loans are the main factors that will determine the sustainability of the automotive industry,” Armin stressed.
He noted that over 90% of car dealers and vendors operate with banking facilities while over 90% of customers buy using hire purchase loans.
The approval rate for car loan applications in Malaysia is at 40% but Armin warned it could go lower this year.
He suggested the public be allowed to withdraw from the EPF (Employees Provident Fund) to make the down payment on a car or repay any outstanding loan.
His group also called for the abolishment of the ceiling imposed by Bank Negara Malaysia on handling fees paid by the banks.
