Earlier this month at CES Faraday Automotive introduced their Tesla rivalling car the Friday but before it can even go into production the company is looking like it will not last much longer. There are many rumours that the company will close down if no fresh funds are injected into the company. Several key top personnel have left the company since end of 2016. Building a car from scratch is no easy feat and without a product to sell to recover the investment cost it is an uphill battle to turn things around. Time is not on their side and having spent 3 years to develop the cars the money is surely being burnt at a fast rate. Total staff count of 1400 is a large number for a new start up. Despite the CEO and founder being a billionaire, throwing millions into the company without a solid product to sell will eventually make any investor think twice.
Faraday had a good concept but failing in their first 2 attempts definitely hurt them. With some fresh injection of money Faraday can turn things around but they need to focus on getting the basics right and move away from attempting to make a sports car and concentrate on making a simple electric car that is affordable and innovative. It will be hard for Faraday to compete head on with Tesla since Tesla has almost a decade head start over Faraday. Tesla is ahead in terms of infrastructure, technology, manufacturing and R&D. The best way is for Faraday to make an affordable entry level electric car that is able to be charged quickly and offer good driving range. Keeping it affordable will allow them to quickly get cars into the market and gradually gain market share while at the same time plan for the charging infrastructure.
Many companies make bold claims about their ability to build better cars than Tesla but so far none have even made a car that can rival the Tesla Model S or P. No point making claims when there is no product to show.
The other new kids on the block are Rimac and NextEv. Lets see which of them will survive and produce a car that people can afford to buy and is practical to use on a daily basis. Concepts are nice but no one sells concepts. People want to buy real cars and not dreams that the car makers project.
Monday 23 January 2017
Wednesday 18 January 2017
Kia Stinger
Kia just release new pictures about its new sport sedan called the Stinger. The point of this car is to be a BMW or Audi challenger. The design itself is very Audi-ish since the designer was formerly the chief designer in Audi. The car claims to have some serious performance with powerful 3.3 litre V6 turbo engine with well over 300hp. This is no doubt impressive coming from Kia when nearly all the cars in the past have been quite sedate and budget oriented cars.
Kia is obviously trying to shake the budget image of their brand and wants a piece of the sports sedan market dominated by BMW and Audi. It is an uphill battle since Kia was never known for it sporting intentions nor have they really gotten into any sort of serious motorsports with real commitment. Kia doesn't have the name pedigree in this respect but nothing ventured nothing gained. It is a positive move by Kia and if they don't start with the Stinger model, they will be forever be labelled as a sedate budget car from Korea.
BMW and Audi took decades and millions of dollars in motorsport investment to gain their reputation. Kia has a big hill to climb to even come close however, it can slowly chip away at BMW and Audi. With a good pricing structure, the Stinger could steal some sales from BMW and Audi. The key thing is that the Stinger must perform as well as it claims. Quite often when Korean car companies launch a car and make claims for performance figures it usually falls short. There have been many cases where a certain performance figure is printed on the brochure but when the car is driven or even dyno tested the tested figure is not even close to the printed figure. this is not good for the brand. BMW on the other hand usually under state their performance figures and that often allows the owner to have a nice surprise when the car is actually driven or dyno tested. For Koreans cars it is unknown if the difference in performance figures are due to transmission loss or something else. It would be good to see Kia live up to their performance claims so that the car is actually as good as claimed.
Kia and Hyundai has been making a lot of improvements lately and they have spared little expense in making their cars better. The Japanese car makers have a thing or two to worry about since Kia and Hyundai no long make rubbish cars. It is quite clear that Kia and Hyundai are willing to invest heavily in development and including all the technology they can muster into all their new models. It won't be long before they are competing on equal footing with the Japanese car makers. Right now the Japanese car makers still have an edge over the Koreans but the edge is only very slight.
Motorsports involvement do contribute a lot to the development of technology as well as the brand image. The cost of motorsport is well worth it in the long term. This is something the Koreans and the Chinese car makers need to really get into.
Kia is obviously trying to shake the budget image of their brand and wants a piece of the sports sedan market dominated by BMW and Audi. It is an uphill battle since Kia was never known for it sporting intentions nor have they really gotten into any sort of serious motorsports with real commitment. Kia doesn't have the name pedigree in this respect but nothing ventured nothing gained. It is a positive move by Kia and if they don't start with the Stinger model, they will be forever be labelled as a sedate budget car from Korea.
BMW and Audi took decades and millions of dollars in motorsport investment to gain their reputation. Kia has a big hill to climb to even come close however, it can slowly chip away at BMW and Audi. With a good pricing structure, the Stinger could steal some sales from BMW and Audi. The key thing is that the Stinger must perform as well as it claims. Quite often when Korean car companies launch a car and make claims for performance figures it usually falls short. There have been many cases where a certain performance figure is printed on the brochure but when the car is driven or even dyno tested the tested figure is not even close to the printed figure. this is not good for the brand. BMW on the other hand usually under state their performance figures and that often allows the owner to have a nice surprise when the car is actually driven or dyno tested. For Koreans cars it is unknown if the difference in performance figures are due to transmission loss or something else. It would be good to see Kia live up to their performance claims so that the car is actually as good as claimed.
Kia and Hyundai has been making a lot of improvements lately and they have spared little expense in making their cars better. The Japanese car makers have a thing or two to worry about since Kia and Hyundai no long make rubbish cars. It is quite clear that Kia and Hyundai are willing to invest heavily in development and including all the technology they can muster into all their new models. It won't be long before they are competing on equal footing with the Japanese car makers. Right now the Japanese car makers still have an edge over the Koreans but the edge is only very slight.
Motorsports involvement do contribute a lot to the development of technology as well as the brand image. The cost of motorsport is well worth it in the long term. This is something the Koreans and the Chinese car makers need to really get into.
Thursday 12 January 2017
Elon Musk's bigger picture
Tesla has been in the news quite often lately because of its self driving technology. Of course there would be stumbling blocks to overcome but Tesla is by far one of the most innovative car companies that emerged in the last 20 years. Tesla's owner Mr. Elon Musk is undoubtedly a visionary and innovator in all fields of business he has entered. Many industry observers were very surprised when Elon Musk decided to open the patent for Tesla electric motor and battery for other car companies to use. Under normal circumstances that would spell disaster since no car company would want a competitor to learn exactly what you know and get a hold of your technological knowledge. Mr Elon Musk is no ordinary car company owner. He happens to be the same person who owns the Gigafactory, soon to be the world's largest battery factory which will supply approximately 70% of the world's battery demand. The gigafactory will also be able to manufacture batteries cheaper than any other factory in the world because of sheer volume. This would also mean that car companies are likely to buy their batteries from Gigafactory. It is a brilliant strategy to open the patent for Tesla to others and later profit from the sale of batteries.
The sale of the batteries will out strip the profit Tesla can make from just selling cars. The mass production of batteries will be so incredibly profitable for Elon Musk since he is not only making batteries for cars but also for home solar energy systems via its Powerbox and also for other solar farms. The business potential is almost limitless and this is a the bigger picture that Elon Musk sees. No other car company in the world is able to boast such claims about having their batteries made in-house. All car companies right now buy their batteries from a battery manufacturer either in Japan, China, Korea or Taiwan. Tesla will be the only car company in the world with the battery sourced from their sister company owned by the same owner.
Drawing profit from gigafactory's sale of batteries to other car companies it is like the other car companies subsidising the production cost of Tesla cars. It will be hard for car companies to resist buying batteries from Gigafactory when the cost of the battery will be lower than any other factory in the world. Great business strategy by Mr. Elon Musk!
The sale of the batteries will out strip the profit Tesla can make from just selling cars. The mass production of batteries will be so incredibly profitable for Elon Musk since he is not only making batteries for cars but also for home solar energy systems via its Powerbox and also for other solar farms. The business potential is almost limitless and this is a the bigger picture that Elon Musk sees. No other car company in the world is able to boast such claims about having their batteries made in-house. All car companies right now buy their batteries from a battery manufacturer either in Japan, China, Korea or Taiwan. Tesla will be the only car company in the world with the battery sourced from their sister company owned by the same owner.
Drawing profit from gigafactory's sale of batteries to other car companies it is like the other car companies subsidising the production cost of Tesla cars. It will be hard for car companies to resist buying batteries from Gigafactory when the cost of the battery will be lower than any other factory in the world. Great business strategy by Mr. Elon Musk!
Monday 9 January 2017
Mid model life cycle facelifts
Car companies like to perform facelifts on their models mid life cycle to keep it looking fresh and use the opportunities to fix bugs. It usually works well to stimulate sluggish sales half way through the model's life cycle of 5 or 7 years depending on car manufacturer. It is also an indication that the car manufacturer is lost or delayed its replacement model launch when it performs more than 1 facelift during the model's life cycle. If the sales of the model drops quickly within a year of its launch the facelift is aimed at triggering fresh interests. In the case of the current Toyota Vios, it is seems like this bread and butter model is facing this problem. It was Toyota's top selling model a few years ago and it practically sold by itself but it is not the case now. Competition from Mazda and Honda has really taken a toll on the Vios' sales. It is so bad that Toyota had to quickly facelift this model barely 1 year after the launch. It is unheard of for a Toyota model.
Nothing lasts forever and riding merely on its brand reputation alone is not enough to keep it as a top selling model.
Ssangyong is another car company that has performed multiple facelifts for old models to stimulate sales. Ssangyong has struggled for sales outside South Korea and the odd-ball designs of the cars doesn't help despite having Mercedes sourced engines and gearboxes. Riding on the Mercedes name alone doesn't mean it will sell well.
The ultimate king of mid model life cycle facelifts has to be Proton. The two models that received the most number of facelifts have to be the Wira and the Saga. These two models were in production for over 10 years and with no replacement models in sight, Proton kept on facelifting it. Nothing really changed and in fact some parts got worse. Good parts were swapped out for cheaper parts and the car's performance actually deteriorated.
One will question how many times can you facelift a model before it really stops selling?!
Nothing lasts forever and riding merely on its brand reputation alone is not enough to keep it as a top selling model.
Ssangyong is another car company that has performed multiple facelifts for old models to stimulate sales. Ssangyong has struggled for sales outside South Korea and the odd-ball designs of the cars doesn't help despite having Mercedes sourced engines and gearboxes. Riding on the Mercedes name alone doesn't mean it will sell well.
The ultimate king of mid model life cycle facelifts has to be Proton. The two models that received the most number of facelifts have to be the Wira and the Saga. These two models were in production for over 10 years and with no replacement models in sight, Proton kept on facelifting it. Nothing really changed and in fact some parts got worse. Good parts were swapped out for cheaper parts and the car's performance actually deteriorated.
One will question how many times can you facelift a model before it really stops selling?!
Sunday 8 January 2017
Proton's collaboration with Suzuki
Proton recently signed a collaboration deal with Suzuki to rebadge Suzuki cars with the Proton brand. this move looks likely to benefit Suzuki more than Proton. Proton needs more models to sell without investing heavily in R&D since most of its in-house developed models have not been well received with the exception of the Saga due to its entry level price. Prior to the collaboration Suzuki have only been selling the Swift model with moderate sales figures. Other models such as the Kizashi and Vitara have been very slow selling. Suzuki has been known for small cars and the Vitara but since the first generation Vitara and Jimny Suzuki has not really made much impact in the Malaysian market.
The collaboration with Proton will allow Suzuki to excess the Proton dealership network and sell more cars. The first model to be introduced is the Ertiga which is a small MPV with a 1.4 litre gasoline engine. This model is popular in Indonesia and it is likely to do well in Malaysia too. Small MPVs are particularly popular in this region as it is viewed to be a versatile vehicle for small families and also for people doing small business. Priced around RM60,000 it is affordable and it could give Perodua's Alza a run for its money. However, it will also potentially kill off Proton's own Extra MPV. The price is very close and since the public know that the Ertiga is essentially a rebadged Suzuki they are more likely to favour the Ertiga.
Confidence in the Proton brand is at its all time low. Without new models they are likely to struggle with sales. Buyers who have a choice will opt for either Perodua models or entry level Japanese models from Honda, Toyota or Nissan. Proton is desperate for sales to stay afloat despite the Malaysian Govt offering some financial backing. The only reason for this backing to keep the Proton employees in their jobs. If Proton shuts down thousands of Proton factory workers will be unemployed.
Malaysia's domestic car market is not big enough to sustain a car factory unless there is significant exporting of cars. Thailand has become the automotive hub in South East Asia and is perfectly capable of producing enough cars to supply to Malaysia. Proton's domestic sales volume is nowhere near high enough to justify the cost of running full fledge factory. Australia is a good example where the automotive industry has died. Holden and Ford have closed their factories and Toyota now source their vehicles from Thailand or Japan directly. Malaysia is likely to follow that route soon.
The collaboration with Proton will allow Suzuki to excess the Proton dealership network and sell more cars. The first model to be introduced is the Ertiga which is a small MPV with a 1.4 litre gasoline engine. This model is popular in Indonesia and it is likely to do well in Malaysia too. Small MPVs are particularly popular in this region as it is viewed to be a versatile vehicle for small families and also for people doing small business. Priced around RM60,000 it is affordable and it could give Perodua's Alza a run for its money. However, it will also potentially kill off Proton's own Extra MPV. The price is very close and since the public know that the Ertiga is essentially a rebadged Suzuki they are more likely to favour the Ertiga.
Confidence in the Proton brand is at its all time low. Without new models they are likely to struggle with sales. Buyers who have a choice will opt for either Perodua models or entry level Japanese models from Honda, Toyota or Nissan. Proton is desperate for sales to stay afloat despite the Malaysian Govt offering some financial backing. The only reason for this backing to keep the Proton employees in their jobs. If Proton shuts down thousands of Proton factory workers will be unemployed.
Malaysia's domestic car market is not big enough to sustain a car factory unless there is significant exporting of cars. Thailand has become the automotive hub in South East Asia and is perfectly capable of producing enough cars to supply to Malaysia. Proton's domestic sales volume is nowhere near high enough to justify the cost of running full fledge factory. Australia is a good example where the automotive industry has died. Holden and Ford have closed their factories and Toyota now source their vehicles from Thailand or Japan directly. Malaysia is likely to follow that route soon.
Thursday 5 January 2017
Electric car competition heating up
It looks like the competition among the electric cars are getting very intense with new players emerging into the market. Once dominated by Tesla the electric car industry just got 2 new players, Faraday Future and NextEv. NextEv may not be ready with a car that a regular consumer will buy but they have showcased what they are capable of. Faraday Future took the big fight to Tesla recently with their new car that can self park and self drive and has amazing acceleration capable of 0-100km/h in under 3 seconds.
Faraday Future took the Tesla concept and enhanced. This doesn't mean that Tesla is not doing anything about it. The competition will make it better for the consumers as these companies will work harder to improve their cars. This is a good thing. China's BYD was one of the early birds but they didn't take their development as far as Tesla but seeing that Faraday Future is here the other up coming electric car companies will be pushing their car development that much harder to be competitive.
There is room for a entry level electric car like the Tesla Model 3 since not all consumers are able to fork out $80,000 for a Tesla P90D. The key to the lower price will be to remove some items in the car and keep the car simple but yet be able to provide sufficient driving range between charge.
For any electric car company to be an outright winner in the industry will depend on the battery development. If a electric car company can pioneer a battery that will offer a driving range exceeding 500km and ultra fast charging via any 110V or 220V socket will be the winner. Right now the charging still takes too long. If the charging time can be cut down to a time similar to refuel a gasoline car, that will be the key to success. It may not be necessary to fully charge the car but at least provide 75% to 80% charge in 10 minutes. It may sound like a lot to ask presently but motorist do not want to spend too much time waiting for their cars to be charged.
Imagine driving from LA to Las Vegas which is about 400km and if the charging stop takes more than 1 hour to get 50% charge, the driver will end up taking an hour longer to arrive at the destination. Short driving range has always been a problem since car owners will always want the flexibility of driving wherever they wish and however far they wish.
The Japanese car companies seem lost with the electric car concept. The Nissan Leaf's range is a joke at less than 280km per charge and Toyota is still sticking to their hybrid concept. The development of the full electric car is now centred around US, Germany and China. IF the Japanese do not innovate quickly they may eventually lose out when the wave of change picks up pace. It is just like how Japan completely lost the plot with the smartphone and mobility wave. Being such an advanced country Japan's e-commerce and internet penetration is seriously lagging behind.
Faraday Future took the Tesla concept and enhanced. This doesn't mean that Tesla is not doing anything about it. The competition will make it better for the consumers as these companies will work harder to improve their cars. This is a good thing. China's BYD was one of the early birds but they didn't take their development as far as Tesla but seeing that Faraday Future is here the other up coming electric car companies will be pushing their car development that much harder to be competitive.
There is room for a entry level electric car like the Tesla Model 3 since not all consumers are able to fork out $80,000 for a Tesla P90D. The key to the lower price will be to remove some items in the car and keep the car simple but yet be able to provide sufficient driving range between charge.
For any electric car company to be an outright winner in the industry will depend on the battery development. If a electric car company can pioneer a battery that will offer a driving range exceeding 500km and ultra fast charging via any 110V or 220V socket will be the winner. Right now the charging still takes too long. If the charging time can be cut down to a time similar to refuel a gasoline car, that will be the key to success. It may not be necessary to fully charge the car but at least provide 75% to 80% charge in 10 minutes. It may sound like a lot to ask presently but motorist do not want to spend too much time waiting for their cars to be charged.
Imagine driving from LA to Las Vegas which is about 400km and if the charging stop takes more than 1 hour to get 50% charge, the driver will end up taking an hour longer to arrive at the destination. Short driving range has always been a problem since car owners will always want the flexibility of driving wherever they wish and however far they wish.
The Japanese car companies seem lost with the electric car concept. The Nissan Leaf's range is a joke at less than 280km per charge and Toyota is still sticking to their hybrid concept. The development of the full electric car is now centred around US, Germany and China. IF the Japanese do not innovate quickly they may eventually lose out when the wave of change picks up pace. It is just like how Japan completely lost the plot with the smartphone and mobility wave. Being such an advanced country Japan's e-commerce and internet penetration is seriously lagging behind.
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