Volkswagen is a well known name in the automotive world being famous for the Beetle and the Golf. VW's presence in South East Asia was weak to say the least until 2007 when VW decided to embark on expanding its business into Malaysia. Having introduced a handful of models it gradually increased the model line up to match the market demand.
With each passing year, VW's sales volume grew and so did its reputation as a good alternative European car for buyers who were tired of driving Japanese or Korean cars but did not want to pay BMW, Audi or Mercedes prices. The strategy worked well until one Managing Director who was appointed to head the local operations decided to focus nearly all their efforts on sales volume rather than providing adequate after sales service. Naturally, selling a car would require sufficient after sales service to match. Not having enough service centre locations the back log of cars to service kept growing. This was not the only problem but the way the management only focused its efforts on sales.
The initial introduction of the 1.4TSI engine with the dry sump DSG transmission was good but problems soon started appearing and the management did not take it seriously to help customers facing the problems. As the number of problems grew the number of angry customers grew leading to a publicized demonstration in front of the VW building creating massive bad press for VW.
The news got around and the sales volume started to drop. The damage was done and VW management had no choice but to take damage control actions to protect its damaged reputation.
The fault was of course with the previous management that put little effort to support customer problems. When there is a problem, customers would expect full support from VW however, VW's approach was very sly and shifted the blame back to the customer which infuriated the customers more. There was also the ridiculous policy of voiding the warranty if the customer was late to service their car by a few days. Having insufficient service centres coupled with long queues it made it impossible for customers to service their cars according to the schedule.
With the miserable sales volume now, VW is desperate to fix their reputation. Many used car dealers now refuse to take trade in for VW cars and many sales centres are struggling to sell enough cars to survive. Despite changing their approach with the service, warranty and customer support, it will be a very long way before VW can repair its reputation. Too much damage has been done and it is unlikely that VW can achieve the sales volumes from 3 years ago in the near future.
Rebuilding the image and reputation is an incredibly difficult task!
Monday, 23 February 2015
Monday, 16 February 2015
design philosophy of car makers from different countries
the 7 main car making countries being USA, Japan, Korea, UK, Italy, France and Germany approach car making in a very different manner.
USA
- cheap
- big engine and thirsty
- mediocre quality
- old technology
- overly soft suspension
- lousy handling
- lazy transmission
- mass market cars with nothing special to offer
Germany
- technology and innovation driven
- designed for appeal and driver emotion
- pushes the technology envelope but at the expense of reliability
- firm suspension setup for superior high speed stability
- expensive in comparison to American and Japanese cars
- leans a lot on motorsports for development
Japanese
- innovative small engines with good fuel economy
- boring to drive (Mostly Toyotas and run of the mill Hondas and Nissans)
- mass market cars with little soul or character
- reliable, dependable with good resale value
- sometime repackage as luxury model (lexus and Infiniti)
- work horse that will keep working and working
Koreans
- cheaper than Japanese cars
- innovation that is catching up to Japanese
- car development often based on German marques
- offers more value than Japanese
- sometimes makes false claims about its performance and economy figures
- not as durable as Japanese
- boring to mass market cars
- previously ugly as hell but since pinching European designers the cars look much better now
Italian
- eccentric car makers
- niche market cars and not the most reliable
- pushed technology envelope at times
- makes cars that are characterful but sometimes defies logic
- supercars are not reliable and often has a love hate relationship with owner
- from cheap to very expensive
French
- makes quirky cars
- innovative design and technology but not always reliable
- strange logic is sometimes applied to their designs
- not the most sought after cars
- moderately priced
British
- good engineering but lacks the follow through on quality and reliability
- nearly all British car makers are dead and / or owned by foreigners
- unreliable and questionable quality
- innovative designs and technological advancement
- poor residual values
The latest force to be noticed is China since it is now the largest car market in the world.
China
- up and coming force in the automotive world
- cheap and tacky
- improving technology and design
- ugly designs with some improvements of late
- questionable quality and reliability
- crude assembly
USA
- cheap
- big engine and thirsty
- mediocre quality
- old technology
- overly soft suspension
- lousy handling
- lazy transmission
- mass market cars with nothing special to offer
Germany
- technology and innovation driven
- designed for appeal and driver emotion
- pushes the technology envelope but at the expense of reliability
- firm suspension setup for superior high speed stability
- expensive in comparison to American and Japanese cars
- leans a lot on motorsports for development
Japanese
- innovative small engines with good fuel economy
- boring to drive (Mostly Toyotas and run of the mill Hondas and Nissans)
- mass market cars with little soul or character
- reliable, dependable with good resale value
- sometime repackage as luxury model (lexus and Infiniti)
- work horse that will keep working and working
Koreans
- cheaper than Japanese cars
- innovation that is catching up to Japanese
- car development often based on German marques
- offers more value than Japanese
- sometimes makes false claims about its performance and economy figures
- not as durable as Japanese
- boring to mass market cars
- previously ugly as hell but since pinching European designers the cars look much better now
Italian
- eccentric car makers
- niche market cars and not the most reliable
- pushed technology envelope at times
- makes cars that are characterful but sometimes defies logic
- supercars are not reliable and often has a love hate relationship with owner
- from cheap to very expensive
French
- makes quirky cars
- innovative design and technology but not always reliable
- strange logic is sometimes applied to their designs
- not the most sought after cars
- moderately priced
British
- good engineering but lacks the follow through on quality and reliability
- nearly all British car makers are dead and / or owned by foreigners
- unreliable and questionable quality
- innovative designs and technological advancement
- poor residual values
The latest force to be noticed is China since it is now the largest car market in the world.
China
- up and coming force in the automotive world
- cheap and tacky
- improving technology and design
- ugly designs with some improvements of late
- questionable quality and reliability
- crude assembly
Tuesday, 10 February 2015
Peugeot RCZ
The French car makers have been making cars for a long time and they have made some real odd ball cars in their history of making cars. Some of the ideas were no doubt fresh but strange. They also had good tendencies to explore their creativity, innovation and design talents. However despite all this the French has never been known to make very reliable cars or super cool cars that people would yearn to buy with the exception of the Bugatti Veyron which ultimately is owned by VW. Since the Bugatti is not a mass market car we would ignore it in this story.
The car that came out about 4 years ago that looked good on the outside is the Peugeot RCZ which is based on the Peugeot 308. The car looks very good from the outside giving it more head turning ability than the Audi TT. The designers did a good job to make this car's exterior design very attractive but that is as far as it goes. It is as if Peugeot decided to walk 80% of the way and decided to stop! The engine is no different from the one in the Peugeot 306 Turbo with the exact same power output, it also had the same gearbox and similar interior with less space.
Since the exterior already made the car look nice and sporty why not go all the way and put in a stonker of an engine to allow it to have the performance to match the looks? I am sure in the parts department Peugeot could find at least a 2.0 litre turbo or a 3 litre engine to push out at least 300hp to make it worth its shape! The car is quite a let down to drive considering the exterior looks makes you want to driver it harder and faster.
In the end it is categorized as a "could be but isn't!" car, meaning it could have been a nice sports car but it isn't, it is just a sporty car! It is just a car for posers who to be seen in but later laughed at by car enthusiasts.
The car that came out about 4 years ago that looked good on the outside is the Peugeot RCZ which is based on the Peugeot 308. The car looks very good from the outside giving it more head turning ability than the Audi TT. The designers did a good job to make this car's exterior design very attractive but that is as far as it goes. It is as if Peugeot decided to walk 80% of the way and decided to stop! The engine is no different from the one in the Peugeot 306 Turbo with the exact same power output, it also had the same gearbox and similar interior with less space.
Since the exterior already made the car look nice and sporty why not go all the way and put in a stonker of an engine to allow it to have the performance to match the looks? I am sure in the parts department Peugeot could find at least a 2.0 litre turbo or a 3 litre engine to push out at least 300hp to make it worth its shape! The car is quite a let down to drive considering the exterior looks makes you want to driver it harder and faster.
In the end it is categorized as a "could be but isn't!" car, meaning it could have been a nice sports car but it isn't, it is just a sporty car! It is just a car for posers who to be seen in but later laughed at by car enthusiasts.
Friday, 6 February 2015
Proton's survival
In the recent released 2014 car sales statistics for Malaysia, the combined sales volume of Proton and Perodua dipped below 50%. This meant that the dominance of the local cars are weakening and the consumers have made choices to buy non local made cars. This is the first time in 25 years where a local car has not dominated the car sales figure in Malaysia. Proton's enemy is not the foreign brands but Perodua. Perodua has consistently chipped away at Proton in the initial years and when the Myvi was launched this model put tremendous pressure on Proton to introduce new models to compete.
The Myvi was almost single handedly forced Proton to work rather than just be complacent with their existing models thinking the Malaysian public will keep buying their out of date models. Perodua was far more innovative and had newer products that appealed to the public.
Proton is now facing certain doom at the rate it is going. All it is doing is revising their existing models by adding more accessories and simple parts to spruce up its image. The facelifted models with additional kits are costing far more than the public is willing to pay for and Proton struggles to sell at higher prices as the it still has the cheap image tagged on it. It is also clamoring for survival by trying to find cooperation partners in China, Middle East and Indonesia. Without fresh new models and improvement in quality it will continue to struggle. The competition from Japanese and Korean brands which are now very established are very difficult to beat. The design and product development teams of Korean and even Chinese car companies are much larger than Proton and all have much larger economies of scale which also means lower costs of production.
Proton is like in a state of limbo where it cannot really get out of this current predicament without new models and wavering support from the local market does not help. The only way out would be for Proton to focus on rebadging and assembly rather than designing new models. Proton's capacity to design new models is just not up to par with other car companies.
The question remains is whether its founder Dr. Mahathir will let it shut down or bail it out using tax payer's money.
The Myvi was almost single handedly forced Proton to work rather than just be complacent with their existing models thinking the Malaysian public will keep buying their out of date models. Perodua was far more innovative and had newer products that appealed to the public.
Proton is now facing certain doom at the rate it is going. All it is doing is revising their existing models by adding more accessories and simple parts to spruce up its image. The facelifted models with additional kits are costing far more than the public is willing to pay for and Proton struggles to sell at higher prices as the it still has the cheap image tagged on it. It is also clamoring for survival by trying to find cooperation partners in China, Middle East and Indonesia. Without fresh new models and improvement in quality it will continue to struggle. The competition from Japanese and Korean brands which are now very established are very difficult to beat. The design and product development teams of Korean and even Chinese car companies are much larger than Proton and all have much larger economies of scale which also means lower costs of production.
Proton is like in a state of limbo where it cannot really get out of this current predicament without new models and wavering support from the local market does not help. The only way out would be for Proton to focus on rebadging and assembly rather than designing new models. Proton's capacity to design new models is just not up to par with other car companies.
The question remains is whether its founder Dr. Mahathir will let it shut down or bail it out using tax payer's money.
Thursday, 5 February 2015
Toyota cars for ASEAN market
Toyota may be the leader in selling cars in South East Asia and even many other regions. They are of course known for their impeccable reliability and also durability. Their cars have probably the best resale value among all the brands in the market. This is something that Toyota has gotten right for the last 30 years. The brand cannot be shaken and when the Toyota name is mentioned two words spring to mind: reliability and good resale value.
In domestic Japan, being its home grown it gets the latest technology and innovations in their new models but in the rest of the world depending on where the cars are sold the specifications vary. The one thing that irks me about Toyota is that the models sold official in South East Asia are mostly assembled in Thailand or Indonesia and often come with out of date engines and transmissions. The bread and butter models such as the Vios (known as the Yaris sedan) is in its 3rd generation now but the engine and gearbox are still the same as the first generation! All Toyota has done has changed the exterior and interior to make it look different. This is the same for the Camry and Hilux. The other model that is using an ancient engine is the Innova.
While the other car companies are constantly evolving for the better, Toyota seems to be building cars with old tech instead of the latest tech for the ASEAN region! why???! it is like short changing the buyers. Toyota know full well that their cars will sell regardless what engine or transmission they put in their cars but at least show some innovation and move with the times.
I know for a fact that putting old engines and transmissions into their cars help them make a lot of money since the R&D cost has been amortized decades ago.
A simple comparison between the Toyota Vios and the new Mazda 2 will show massive difference in technology. Mazda 2 has 6 speed auto transmission, engine start / stop function, keyless entry with button on the door handle, Skyactiv engine, head up display, integrated LCD with touch screen with wireless connectivity and reverse camera. None of these are available on the top spec Vios that sells for a higher price. It is little wonder why Mazda and Honda are stealing sales away from Toyota. The public is not as stupid as they think, and they are becoming more well informed. They want value and they want to buy something new and not something repackaged to look new when it is not!
In the case of the indestructable Toyota Hilux, the same model has been in production for close to 10 years now! The rest of the competition has already introduced replacement models and started to steal sales from Toyota. The motto of "if it is not broken, don't fix it!" cannot help protect the sales figures forever.
In domestic Japan, being its home grown it gets the latest technology and innovations in their new models but in the rest of the world depending on where the cars are sold the specifications vary. The one thing that irks me about Toyota is that the models sold official in South East Asia are mostly assembled in Thailand or Indonesia and often come with out of date engines and transmissions. The bread and butter models such as the Vios (known as the Yaris sedan) is in its 3rd generation now but the engine and gearbox are still the same as the first generation! All Toyota has done has changed the exterior and interior to make it look different. This is the same for the Camry and Hilux. The other model that is using an ancient engine is the Innova.
While the other car companies are constantly evolving for the better, Toyota seems to be building cars with old tech instead of the latest tech for the ASEAN region! why???! it is like short changing the buyers. Toyota know full well that their cars will sell regardless what engine or transmission they put in their cars but at least show some innovation and move with the times.
I know for a fact that putting old engines and transmissions into their cars help them make a lot of money since the R&D cost has been amortized decades ago.
A simple comparison between the Toyota Vios and the new Mazda 2 will show massive difference in technology. Mazda 2 has 6 speed auto transmission, engine start / stop function, keyless entry with button on the door handle, Skyactiv engine, head up display, integrated LCD with touch screen with wireless connectivity and reverse camera. None of these are available on the top spec Vios that sells for a higher price. It is little wonder why Mazda and Honda are stealing sales away from Toyota. The public is not as stupid as they think, and they are becoming more well informed. They want value and they want to buy something new and not something repackaged to look new when it is not!
In the case of the indestructable Toyota Hilux, the same model has been in production for close to 10 years now! The rest of the competition has already introduced replacement models and started to steal sales from Toyota. The motto of "if it is not broken, don't fix it!" cannot help protect the sales figures forever.
Yas Marina in Abu Dhabi
I was fortunate enough to visit the Yas Marina circuit in Abu Dhabi in my recent trip to UAE. It was an impressive facility with top notch surface for racing, new special run off surface and tip top hospitality facilities. They even had a Johnny Rockets and a Coffee bar at the viewing deck from the racing school building.
Yas Marina is one of the newer circuits in the F1 calendar and it hosts the last race of each season. The track and its surroundings is impressive and very well maintained even during off season. They have a good and comprehensive driving experience program with cars ranging from the Aston Martin GT4, Radical SST and the Formula 3000 cars available. There is also a drifting school program where the student will learn how to drift in a Toyota 86.
The driving experience programs are well managed with well trained foreign instructors guiding the students around the track (for first 1-2 laps) and then allowing the student to push hard thereafter. The cost of the programs are also very reasonable starting from 1200 AED for the Radical SST where you get 20 minutes of track time. The cars are not tuned down to make it safe and slow, the cars are actual race cars with full power at your disposal. The driving programs are well patronized by visitors from all over the world.
Depending on the skill level of the student the instructors will alter their amount of guidance provided. Everyone has a different skill level so it is a good chance to learn or improve one's driving skills behind the wheel of some of the best racing cars in the world.
Right next to the Yas Marina circuit is the Ferrari world theme park. It is nowhere near as big as other mainstream theme parks but it is nonetheless the only Ferrari theme park in the world.
For any car nut, the Yas Marina circuit is a must visit. check out their driving programs on www.yasmarinacircuit.com/
Yas Marina is one of the newer circuits in the F1 calendar and it hosts the last race of each season. The track and its surroundings is impressive and very well maintained even during off season. They have a good and comprehensive driving experience program with cars ranging from the Aston Martin GT4, Radical SST and the Formula 3000 cars available. There is also a drifting school program where the student will learn how to drift in a Toyota 86.
The driving experience programs are well managed with well trained foreign instructors guiding the students around the track (for first 1-2 laps) and then allowing the student to push hard thereafter. The cost of the programs are also very reasonable starting from 1200 AED for the Radical SST where you get 20 minutes of track time. The cars are not tuned down to make it safe and slow, the cars are actual race cars with full power at your disposal. The driving programs are well patronized by visitors from all over the world.
Depending on the skill level of the student the instructors will alter their amount of guidance provided. Everyone has a different skill level so it is a good chance to learn or improve one's driving skills behind the wheel of some of the best racing cars in the world.
Right next to the Yas Marina circuit is the Ferrari world theme park. It is nowhere near as big as other mainstream theme parks but it is nonetheless the only Ferrari theme park in the world.
For any car nut, the Yas Marina circuit is a must visit. check out their driving programs on www.yasmarinacircuit.com/
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