Friday 17 February 2012

Why certain brands of cars struggle to sell in Malaysia

Here are a list of car brands that struggled to sell in Malaysia:
- Chevrolet - due to inconsistency in distribution, poor after sales service network and poor selection of models. The residual values took a hammering especially when the previous distributor DRB dumped prices for unsold units at 40% discount! Many of the previous owners of Chevrolet cars were furious and refused to buy another Chevrolet.
- Renault - Renault has bad reputation for poor reliability in the past coupled with poor service network and terrible residual values. With the recent introduction of the sporty model such as the Clio Cup R and the Megane Sport, there has been some injection of enthusiasm into the brand but the sales of these models are limited.
- Alfa Romeo - only popular among enthusiasts, the poor reliability and residual values kept the brand from selling well. Die hard fans will still buy the Alfas but with the dwindling model range, Alfa Romeo will continue to struggle in Malaysia
- Citreon - poor reliability, poor after sales service network and lack of available parts make this brand a real lemon to own. quirky designs don't help when it comes to service and repairs. The residual values are one of the worst in the market
- Ssangyong - had reasonably strong sales in 2005 / 2006 but when news of the company going bankrupt came, the car sales practically dried up and the resale values tanked. Quirky designs meant that the car only appealed to some people who could live with the way it looks. Having a limited after sales service network also meant that it was not convenient for owners to service their vehicle.
- Audi - the poor reception of the Audi brand is down to the distributor. Audi hasn't had the luck to deal with the right distributor until now. Audi struggled to sell cars in large numbers (exceeding 200 cars a month) because both distributors (in the past and the present) have done lousy jobs in marketing the brand. The previous distributor Auto Dunia did not focus on dealership development and did not stock the necessary parts to support the after sales network. The current distributor DRB does not order sufficient cars to stock up and sell, leaving customers to wait for 5 to 12 months for a car! DRB only has 3 locations to cater for sales and servicing. This is a real shame as Audi is one of the top selling brands in Europe and the grey importers have been selling more A4, Q5, Q7 and TTs than the official distributor.
- Subaru - Subaru is one brand that has struggled tremendously to sell via its official distributor. With only 1 sales and service centre, the after sales support is simply insufficient. The make things worst, the distributor does not even stock commonly replaced parts. The grey importers combined sell more than 30 times the number of Subarus than the official distributor Motor Image.
- Land Rover - considered a luxury brand with prestige but Land Rover cars are probably one of the fastest depreciating cars in Malaysia. Land Rover cars are not known for their reliability and couple that with high prices and only 1 location to service the car.. it is going to be difficult to see the brand grow. Only with the recent introduction of the Evoque, the sales of the cars have hit double digits per month.
- Skoda - always considered the poor cousin of VW, Skoda's distributor has struggled to make an impact with the brand. Relatively unknown in Malaysia and limited after sales service network made it difficult for the brand to grow. With VW having a strong market presence and good price strategy, Skoda will continue to struggle to compete and VW is able to price their cars cheaper than Skoda.

Combining the factors of poor after sales service network, lousy reliability, expensive parts or lack of parts, lousy distributors and lack of marketing, many of these brands will continue to struggle.

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