Car workshop services should be liberalised through NAP

Move would provide consumers with choice of over 50,000 workshops nationwide, says CarBengkel CEO


Liberalisation  of workshop services should be included in the National Automotive Policy (NAP), which would allow new car owners to maintain their warranties when they visit their preferred workshops for maintenance, services and repair works.

CarBengkel CEO Datuk Armin Baniaz Pahamin said the move would give consumers a choice of over 50,000 workshops around the country, instead of just referring their automotive issues to the 500 workshops that are authorised by each car manufacturer.

“It is more convenient for owners to maintain their vehicles at any preferred workshops in terms of location and perhaps price. This would also assist car owners to keep their car ownership cost low,” he said.

Armin Baniaz said the liberalisation would benefit some 590,000 new car owners yearly, who would still enjoy their warranties while going to their preferred workshops for various services including the periodical car inspection.

He said the proposed liberalisation will complement the Domestic Trade, Cooperatives and Consumerism Ministry’s (KPDNKK) motion in accrediting independent workshop operations under the Automotive Maintenance and Repair Service Bill, which was supposed to be tabled in the Parliament last month.

KPDNKK Minister Datuk Seri Hamzah Zainuddin earlier said that the bill enforcement was expected to raise the level of professionalism among mechanics, on par with other career fields.

However, the bill was not tabled as the Parliament session was adjourned and dissolved to make way for the upcoming 14th General Election.

As at last year, there are about 53,000 workshops in the country with 30,000 of them registered with KPDNKK. Of the total, only about 500 are affiliates of original equipment manufacturer’s (OEM) authorised service centres.

While the ministry is working on the licensing plan, the Malaysia Automotive Institute (MAI) has also up-scaled more than 2,400 independent workshops under its Workshop Transformation Programme begun in 2014.

Armin Baniaz said the government should really consider the proposed liberalisation of workshop services as there will be well-trained mechanics available, with the ability to provide better quality services as good as the OEM centres.

At present, one OEM service centre will have to cater to about 1,200 vehicles annually and the monopoly among OEM service centres is anti-competitive to more than 40,000 independent workshops.

“Authorities in countries such as Singapore have already stepped in to mitigate the monopoly in their respective automotive retail sector as it is deemed anti-competitive.

“As a result, the supply of the original parts has been opened to all workshops. Now they are competing based on the quality of services, which also opens an equal playing field among those in the auto aftersales service industry,” said Armin Baniaz.

The Competition Commission of Singapore last year announced that 90% of dealers in the country have agreed to void warranty restriction, which crimps independent workshops’ ability to compete effectively.

Among the distributors that agreed were Mercedes-Benz, Mitsubishi, Toyota, Porsche and BMW brand dealers. Volkswagen Group and Premium Automobiles, which sell Audi cars, never placed such warranty restriction in the country.

In Malaysia, most OEMs provide up to five years of warranty and certain maximum mileage in the sales agreement, with the condition that the vehicle must not be serviced by other than the OEM-authorised workshops during the period.

Armin Baniaz said the government must also consider enforcing the supply of original parts to independent workshops.

He said besides consumers, the vendors can also benefit via the sales of the original parts to all 50,000 workshops directly instead of to only 500 outlets.