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    PEDA suggested that an automotive council which will be responsible to regulate and administer any new policy by the government need to be set up.Read the detail news from Bernama below:


    Proton Dealers Association Malaysia (PEDA) today (19 May) called for the setting-up of a statutory automotive council which will regulate and administer any new or revised governmental policy pertaining to the automotive eco system.

    Any issue which is related to the automotive eco system should be referred to the proposed automotive council, the association said in a statement here today.

    So far, there is no statutory body that represents the interest of the automotive eco system although the automotive industry is a significant sector that contributes substantially to the country’s economic growth, its acting president Armin Baniaz Pahamin said.

    “In the absence of a statutory council to represent the automotive eco system, the automotive industry will be weaker and will continue to deteriorate,” he said.

    Citing the recent proposal by the General Insurance Association of Malaysia (PIAM) on direct rebate for motor insurance, he said the proposal which was approved by Bank Negara, will actually see automotive dealers losing more than 20 percent income.

    “The proposal will destroy the automotive eco system, specifically the automotive dealer’s network. Motor insurance is an important segment of the automotive eco-system,” Armin said.

    He said currently all new and used car dealers are general insurance agents and motor insurance premium generated by car dealers are in excess of RM1 million per annum per agency.

    He said these premiums subsidise the increasing overhead cost as well as determine the break-even profitability of car dealers especially during an economic crisis.

    He said bypassing agencies with a direct rebate to customers will contribute to a higher unemployment rate and further weaken the automotive eco-system.

    Referring to the automotive industry as “bank dominated market”, Armin said without bank facilities for car vendors and dealers and hire-purchase end-financing for car buyers, the automotive industry will fail.

    “Currently, banks are already enforcing dealers to terminate their existing insurance company in favour of bank owned insurance company by imposing a hefty penalty and higher interest to the banking facilities rendered to the dealers (if the dealer do not subscribe to the bank insurance company),” he said.

    Dealers were told they will not enjoy any insurance renewal commission when they subscribe to the bank insurance under force majeure. All commission for the insurance renewal will be forfeited by the bank.

    PEDA will not hesitate to advise its members and other automotive car dealers association to boycott members of PIAM that support and implement the proposal.

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    1 Response

    1. Niemans says:

      This is a good move by PIAM and Bank Negara. I am supporting this because I am a user.

      Let us see what this hubba is all about:

      Rebates for direct insurance
      18 May 2009, The Star

      PETALING JAYA: Come July 1, car owners who buy motor insurance directly from insurance companies without using the services of an agent will qualify for mandatory rebates, a move that could render agents redundant. The move would see new customers being given a 5% rebate on their insurance if they buy it via channels such as the Internet, telemarketing, direct mailing or by walking into the insurance company. These customers would also get a 10% rebate for renewals in the second year. In a circular sent to the General Insurance Association of Malaysia (PIAM) dated April 17, Bank Negara said the rebates would only apply to actual owners of the vehicles. The circular added that Bank Negara had “no objections” to PIAM’s proposal for the mandatory rebates. This is understood to mean that the move would more likely be implemented than not.

      It is understood that the circular was the outcome of correspondence and meetings between PIAM and Bank Negara on the association’s proposals towards self-regulation of the industry. In the circular, the central bank said the rationale for mandatory rebates was to “promote the promulgation of alternative channels of distribution so as to increase the penetration of insurance to the masses.”

      When Bank Negara came back to the table, it seemed that they were saying if insurance companies were willing to reward agents, then they could also provide this benefit to policyholders.


      Well, this is really up to the consumer to decide whether they need the service of an agent or to buy it directly themselves. This move will force agents to work harder and to provide a better service to the consumer which been lacking all this while.

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