This article first appeared in The Edge Malaysia Weekly on January 21, 2019 - January 27, 2019

The recent showdown between the Malaysian Automotive Association (MAA) and the Ministry of International Trade and Industry (Miti) over the approval of prices for new car models shows that transparency does not always translate into market-friendly policies.

On Jan 16, MAA slammed the government for the alleged delay in approving the pricing of new car models, which it says has affected plans by its members to launch new vehicles. MAA president Datuk Aishah Ahmad said the wait can be as long as five to seven months.

Miti then clarified that the delay was because the government wants the decision-making process to approve car prices to be transparent and fair by going through the Automotive Business Development Committee (ABDC). It was established in 2006 to facilitate the collective decision-making process in determining the quantum of incentive to be extended to automotive companies and  comprises representatives from Miti, the Ministry of Finance (MoF); Malaysia Investment Development Authority; Malaysia Automotive, Robotic, and IOT Institute; and the Customs Department.  Under the previous administration, some automotive companies had obtained the incentives directly from MoF, bypassing ABDC, says Miti.

PH is strengthening due process and governance, so that incentives are granted and distributed to the worthy, it says.

While the measures are being carried out in the rakyat’s interest, the government should be aware that additional red tape means extra expenses to businesses and investors and eventually translate into a higher cost of living.

So, it should get feedback from the industry to ensure it does not come at the expense of businesses and make Malaysia less investor-friendly.

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