PROTON EDAR DEALERS ASSOCIATION MALAYSIA
“INTEREST RATE REDUCTION WILL ONLY BENEFIT BANKS”.
JANUARY 2009, KUALA LUMPUR. The downward revision in the Bank’s lending and base financing rates will have negligible effect on Proton car sales” said Armin Baniaz Pahamin, Acting President, Proton Edar Dealers Association Malaysia.
- Currently, the interest rate for Proton car remained at 3.88% for hire-purchase loan duration of 7 years or less and 3.99% for hire-purchase loan duration of 8 and 9 years.
- The interest rate has remained constant and there is no downward adjustment for Proton car interest rates even after the last revision by Bank Negara in November 2008.
- In the latest revision by Bank Negara, it is doubtful that any interest rate adjustment to be made to new proton cars and on the bank facilities subscribed by Proton dealers.
- Similarly, there is no interest rate adjustment even on Bank facilities subscribed by Proton Edar dealers (with most banks) during last November Bank Negara revision.
- The interest rate for banking facilities offered to proton dealers by most banks is on a fix interest rate on daily and period-rest. Only a few facilities (by one or two banks) interest rate are fixed based on Base Lending Rate (BLR).
- The interest rate reduction is an additional profit to Banks perhaps as a support for the anticipated losses during this recession year with negligible benefits to the dealers or the customers.
- The public or car buyers do not benefit from the November interest revision nor does majority of Proton dealers.
- The Public or potential proton buyer are still facing difficulty with securing hire-purchase loan to buy new proton cars given the high risk profile programmed for proton customers.
- To improve the customers risk profile that is based on overall proton historical sales, the NPL for Proton brand name should be in a different category for new Proton car sales by Proton AUTHORISED DEALERS and different classification for ‘new-and-used-proton’ car sales by USED CAR DEALERS. Then the NPL will be more accurate and customer’s loan approval can be improved.
- Government should only allow Proton authorized dealers to submit for new proton hire-purchase loan submission to Banks to mitigate unnecessary fraud, CBT and NPL (by unauthorized dealers). Currently any dealer can submit to the bank direct.
- Unauthorized car dealer Hire purchase loan submission for new Proton cars contributes to a higher NPL. Authorized proton dealers had to comply with strict requirement by Proton and will not jeopardize their dealership for any fraud or syndicated buyers.
- Factors that will spur the automotive industry include a more flexible and cheaper banking facilities, flexible loan duration, easier loan approval and a regulated pricing for second hand cars.
- The public are heavily burden when the value of their existing car is less than the balance loan amount of the said car. This will further hamper the growth of the automotive sales.
- 9 out of 10 customers would want to trade-in their existing car to buy a new car, but many are not able to trade-in their car, because the car value is lower than the balance loan amount. The value of second-hand or registered used cars car depends entirely on the banks prerogative on the financing amount.