Since Geely took over Proton in the last few months the new CEO from China has made some drastic changes in the attempt to turn the company around and fix all the existing problems that plagued Proton. It is no means an easy task but without making drastic changes Proton can never return to its former glory days. The company was saddled with under performing staff, over inflated prices for parts due to excessive corrupt practices by the management and procurement team and inefficient operations.
To stop the bleeding of funds, the new CEO informed all existing suppliers to reduce their costs by 20% or face being replaced by China sourced suppliers. The second thing was to change the terms and conditions of the dealers. The dealers' margin period was slashed and those without sufficient funds would be terminated. The third thing was to change the management structure to weed out under performing staff.
The cost cutting exercise will eliminate many suppliers who were feeding Proton staff in exchange for supply contracts. It was estimated that Proton would save more than 15% on cost just by cutting cost on parts. It would also force the corrupt employees to think otherwise.
Streamlining the dealers agenda was to reduce the dependency on small dealers and focus on building 3S and 4S large dealerships that could provide a better overall image of the brand and also provide the necessary support for the car owners. Proton previously had one of the lowest customer satisfaction ratings in the country. The old management did not pay much attention to customer satisfaction due to the Government protection however since the competition from Perodua and other car makers made it harder for Proton the old management style was doomed.
Geely will introduce their car designed models with a Proton badge in 2018 after going through some research and development work to convert the model from left hand drive to right hand drive. In 2018 it will be a big transition year and it is unlikely that Proton will start making profit. The profit may start to come in 2019 when sufficient models have been introduced.
Geely will need sufficient time to revamp the entire business and create customer confidence. Traditionally Malaysian buyers have not really accepted China made cars due to quality concerns but with the existing dealership network the confidence will start to grow and soon Geely may find Malaysia as their largest export market.
It is also very likely that Geely will start to utilise more of Volvo's technology since Geely owns Volvo. This is a plus point for Proton. The probably of selling a better designed car is always a positive point.
Thursday, 14 December 2017
Using Cryptocurrency to buy cars
The cryptocurrency revolution is by far the biggest piece of news for 2017 and it is set to pave the way for the future. The impact of Bitcoin and other secondary coins are really shaking things up. Previously economist and financial experts were laughing at the possibility of using cryptocurrency for transactions or to purchase real world items but more and more people are proving them wrong and it won't be long before the economist and financial experts find themselves swallowing their own words!
Earlier this year a young man in America bought a Lamborghini Huracan using the profits he made from investing in Bitcoin at a very early stage. The total investment cost was only US$115 worth of Bitcoin which appreciated in value tremendously to well over US$10,000 per Bitcoin. He sold some of the Bitcoin he had and bought the Huracan. This news went viral as it was the first time anyone realised their profits from investing in Bitcoin to purchase a high ticket item.
Yesterday a man from China bought US$5 million worth of old Formula One cars (4 units) using Litecoin. No one knows if he bought the Litecoin from an exchange or if it was mined using his computers. Regardless how he obtained the Litecoin the fact in the matter is that he was able to materialise the transaction and successfully purchased the Formula One cars.
The early adopters will be the biggest benefactors of the cryptocurrency revolution and it will definitely change the face of purchasing vehicles. I believe it won't be long before more car dealers will accept some form of cryptocurrency as a mode of payment. There are hundreds of cryptocurrencies in the market now but the main few remain the ones that are most popular. The speed of transaction when using cryptocurrency will enable faster purchasing process of the cars and makes it a lot easier than relying on bankings and paying ridiculous bank fees.
The impact on the banking sector will be huge since many people who know how to mine cryptocurrencies will be able to buy cars with far less cost and it may do away with loans altogether. Consider this: a person is able to mine a Bitcoin over 1 year and the Bitcoin value reaches US$20,000 each, to buy the car the person is literally paying only the cost of electricity of running the mining machine and internet line so the cost acquiring the Bitcoin is less than US$4,000 (depending on country's electricity tariff). This means the person buying the car is only paying US$4,000 for a US$20,000 car!
For the dealers it has a positive impact too. With the cryptocurrencies increasing in value every month, any form of cryptocurrency held accepted by the car dealer will appreciate in value and increase the profits for the car dealer.
It is unsure how many dealers will quickly make the transition to accept cryptocurrencies but it is likely that we will see some early adopters in 2018.
Earlier this year a young man in America bought a Lamborghini Huracan using the profits he made from investing in Bitcoin at a very early stage. The total investment cost was only US$115 worth of Bitcoin which appreciated in value tremendously to well over US$10,000 per Bitcoin. He sold some of the Bitcoin he had and bought the Huracan. This news went viral as it was the first time anyone realised their profits from investing in Bitcoin to purchase a high ticket item.
Yesterday a man from China bought US$5 million worth of old Formula One cars (4 units) using Litecoin. No one knows if he bought the Litecoin from an exchange or if it was mined using his computers. Regardless how he obtained the Litecoin the fact in the matter is that he was able to materialise the transaction and successfully purchased the Formula One cars.
The early adopters will be the biggest benefactors of the cryptocurrency revolution and it will definitely change the face of purchasing vehicles. I believe it won't be long before more car dealers will accept some form of cryptocurrency as a mode of payment. There are hundreds of cryptocurrencies in the market now but the main few remain the ones that are most popular. The speed of transaction when using cryptocurrency will enable faster purchasing process of the cars and makes it a lot easier than relying on bankings and paying ridiculous bank fees.
The impact on the banking sector will be huge since many people who know how to mine cryptocurrencies will be able to buy cars with far less cost and it may do away with loans altogether. Consider this: a person is able to mine a Bitcoin over 1 year and the Bitcoin value reaches US$20,000 each, to buy the car the person is literally paying only the cost of electricity of running the mining machine and internet line so the cost acquiring the Bitcoin is less than US$4,000 (depending on country's electricity tariff). This means the person buying the car is only paying US$4,000 for a US$20,000 car!
For the dealers it has a positive impact too. With the cryptocurrencies increasing in value every month, any form of cryptocurrency held accepted by the car dealer will appreciate in value and increase the profits for the car dealer.
It is unsure how many dealers will quickly make the transition to accept cryptocurrencies but it is likely that we will see some early adopters in 2018.
Wednesday, 6 December 2017
what Success and failure of F1 means to car companies
It is obvious to see that success in F1 can be a great promotional boost for a car manufacturer. Take the example of Mercedes in the recent years. The road car sales have shot up through the roof setting new records year after year. The sales success from the showroom is nothing short of staggering. Mercedes really capitalised on their racing success and it made many new buyers turn to Mercedes.
On the flip side, Honda suffered tremendously in F1 with numerous engine failures which did affect their road car sales to some degree. Despite the failure in F1 Honda did not suffer a major setback in sales but their image took a beating. Being a trusted brand the road cars were still selling but it lost its image as front runner for engine technology.
Toyota also suffered a similar fate when it failed miserable in F1 10 years ago despite investing almost $1 billion and had nothing to show for it.
F1 is an expensive and cruel sport that can reward or punish the car company image-wise. Ferrari made huge steps forwards in terms of brand image and marketing from their success in F1 15 years ago at the hands of Michael Schumacher. Now Mercedes is doing the same thing with Lewis Hamilton.
Being able to compete in the top 3 will yield good marketing mileage for car companies but once numerous engine failures and DNFs start appearing it definitely doesn't bode well for the image.
It is a big gamble for any car manufacturer and with ever changing regulations it is all about who gets it right and makes the most of it. with every rule change one company or one team will be able to capitalise on it. There seems to be like a trend with an era of success for one particular team just like how Ferrari was the top for 5 years then came Mclaren then Redbull and now Mercedes. the fortunes for the teams change and the change can be very drastic.
In the mid 1990s Williams won 2 constructor's championships but after the second championship the car team was nowhere near the top 3 and were struggling with mid field teams. It just goes to show that one year's success does not mean that it will translate to similar results the next year. this is the cruel part about F1.
Mercedes is now enjoying their reign of success but no one knows how long this will carry on for and who will be the next to enjoy a reign of success.
On the flip side, Honda suffered tremendously in F1 with numerous engine failures which did affect their road car sales to some degree. Despite the failure in F1 Honda did not suffer a major setback in sales but their image took a beating. Being a trusted brand the road cars were still selling but it lost its image as front runner for engine technology.
Toyota also suffered a similar fate when it failed miserable in F1 10 years ago despite investing almost $1 billion and had nothing to show for it.
F1 is an expensive and cruel sport that can reward or punish the car company image-wise. Ferrari made huge steps forwards in terms of brand image and marketing from their success in F1 15 years ago at the hands of Michael Schumacher. Now Mercedes is doing the same thing with Lewis Hamilton.
Being able to compete in the top 3 will yield good marketing mileage for car companies but once numerous engine failures and DNFs start appearing it definitely doesn't bode well for the image.
It is a big gamble for any car manufacturer and with ever changing regulations it is all about who gets it right and makes the most of it. with every rule change one company or one team will be able to capitalise on it. There seems to be like a trend with an era of success for one particular team just like how Ferrari was the top for 5 years then came Mclaren then Redbull and now Mercedes. the fortunes for the teams change and the change can be very drastic.
In the mid 1990s Williams won 2 constructor's championships but after the second championship the car team was nowhere near the top 3 and were struggling with mid field teams. It just goes to show that one year's success does not mean that it will translate to similar results the next year. this is the cruel part about F1.
Mercedes is now enjoying their reign of success but no one knows how long this will carry on for and who will be the next to enjoy a reign of success.
Sunday, 19 November 2017
Tesla Roadster and Semi
Elon Musk kept the new Tesla Roadster very quiet until the official launch. Like typical Tesla the Roadster was nothing short of spectacular. There were rumours floating around that Tesla would make a new sports car but no one had any idea how good it would be.
The new car looks stunning but it is not all about the looks. The car performs far beyond the expectations of anyone. The performance figures is simply amazing and really would rock the super car industry. The sticker price is US$250,000 which is right up there with Lamborghini but the Tesla Roadster will show any Lamborghini a thing or two about serious performance. The Roadster can accelerate to 100km/h in 1.9 seconds!! Thats is like Formula One car territory, but this is not the best part about it. The car's driving range is now 620miles or 1000 km! there is no super car in the market that can achieve even 500km on a fuel tank of fuel.
The Roadster just moved the performance yardstick a country mile further for all the car companies to chase. They are already struggling to chase the P100D and now it has just gotten a lot more difficult. Porsche claimed that their new electric car will be better than the P100D with faster charge times but it is not due to be available until 2020, by then no one knows what else Tesla will introduce and push the performance boundary even further.
I believe the Roadster will shake up the super car segment since no standard production Ferrari, Lamborghini, Porsche or Mclaren can achieve such figures. The closest rival for the Roadster will be the Rimac Concept-one which is not for sale yet. The Rimac Concept-one is a real contender for the Roadster since it is also capable of similar performance figures.
The second part of the new Tesla launch was the Semi that was launched which claimed to have a 500 miles driving range. After that launch Walmart immediately placed orders for 15 units. Tesla is obviously moving in the right direction with shaking up the transport industry. The Semis offer incredible performance and extremely good drag coefficient to enable it to be significantly better than any big truck in the market. There are just so many advantages of the Tesla Semi since it is fully electric there will be far less maintenance involved, less pollution and the high torque from the electric motor will enable the Semi to easily haul cargo compared to traditional trucks that struggle with heavy loads.
The 500 miles driving range is good enough since most trucks travel an average distance of 300 miles for single trips. this is well within the range with good surplus.
The new car looks stunning but it is not all about the looks. The car performs far beyond the expectations of anyone. The performance figures is simply amazing and really would rock the super car industry. The sticker price is US$250,000 which is right up there with Lamborghini but the Tesla Roadster will show any Lamborghini a thing or two about serious performance. The Roadster can accelerate to 100km/h in 1.9 seconds!! Thats is like Formula One car territory, but this is not the best part about it. The car's driving range is now 620miles or 1000 km! there is no super car in the market that can achieve even 500km on a fuel tank of fuel.
The Roadster just moved the performance yardstick a country mile further for all the car companies to chase. They are already struggling to chase the P100D and now it has just gotten a lot more difficult. Porsche claimed that their new electric car will be better than the P100D with faster charge times but it is not due to be available until 2020, by then no one knows what else Tesla will introduce and push the performance boundary even further.
I believe the Roadster will shake up the super car segment since no standard production Ferrari, Lamborghini, Porsche or Mclaren can achieve such figures. The closest rival for the Roadster will be the Rimac Concept-one which is not for sale yet. The Rimac Concept-one is a real contender for the Roadster since it is also capable of similar performance figures.
The second part of the new Tesla launch was the Semi that was launched which claimed to have a 500 miles driving range. After that launch Walmart immediately placed orders for 15 units. Tesla is obviously moving in the right direction with shaking up the transport industry. The Semis offer incredible performance and extremely good drag coefficient to enable it to be significantly better than any big truck in the market. There are just so many advantages of the Tesla Semi since it is fully electric there will be far less maintenance involved, less pollution and the high torque from the electric motor will enable the Semi to easily haul cargo compared to traditional trucks that struggle with heavy loads.
The 500 miles driving range is good enough since most trucks travel an average distance of 300 miles for single trips. this is well within the range with good surplus.
There will be a lot more to come from Tesla. All those car companies who laughed at Tesla will start to cringe knowing that despite Tesla being a small car manufacturer they have made all the car companies sit up and listen. Tesla made all other car companies look old and out of date because the amount of innovation that goes into any Tesla is nothing short of impressive. Thinking outside the box has really made Tesla a force to be reckoned with!
Sunday, 12 November 2017
Corvette ZR1
The latest iteration of the Corvette is by far the best that Chevrolet has ever produced. It is light, fast, agile and incredibly powerful. The latest version ZR1 just moved that yardstick further with a stonking 755hp and 930Nm of torque driving through the rear wheels. It is obviously an attempt to keep up with Ferrari and other Europeans hypercars that push out over 650hp. The horsepower game is definitely moving on to newer pastures and it is exciting for new buyers. The age old problems still remain and that is 90% of buyers will likely struggle to drive it since they already struggle to control a 600hp car let alone one that is 750hp!
The ZR1 has proven to be highly capable and is a bargain compared to exotics like Ferrari and Lamborghini. It is little wonder why it is so popular in America. For such little money you can scare the living hell out of exotics that cost 3 times more. The Corvette is also a good looking car and is able to turn heads. I won't be surprised if Chevrolet will aim for a more extreme version is more power soon seeing that the Dodge Hellcats are easily pushing well over 700hp! The motto will be something like this "since we are at it might as well go for more power!".
It appears that the American car makers are on a rampage to build cars with ridiculous power. their design philosophy is different from the Germans that look at refinement over power. The Americans aim for huge power figures as a marketing tool to attract hot blooded young buyers and those middle age guys with mid life crisis. This recipe seems to work and these tuned models have been selling well.
Value for money, bang for your buck sports sedans, sports SUVs and sports car are all the rage now in America. Screw the hybrids...!
I do hope that these car makers will spend a bit of marketing dollar toward driver training for every Hellcat, Corvette or any other high horsepower car they sell. It won't look good in the news when many are crashed due to driver's inability to control the car.
The ZR1 has proven to be highly capable and is a bargain compared to exotics like Ferrari and Lamborghini. It is little wonder why it is so popular in America. For such little money you can scare the living hell out of exotics that cost 3 times more. The Corvette is also a good looking car and is able to turn heads. I won't be surprised if Chevrolet will aim for a more extreme version is more power soon seeing that the Dodge Hellcats are easily pushing well over 700hp! The motto will be something like this "since we are at it might as well go for more power!".
It appears that the American car makers are on a rampage to build cars with ridiculous power. their design philosophy is different from the Germans that look at refinement over power. The Americans aim for huge power figures as a marketing tool to attract hot blooded young buyers and those middle age guys with mid life crisis. This recipe seems to work and these tuned models have been selling well.
Value for money, bang for your buck sports sedans, sports SUVs and sports car are all the rage now in America. Screw the hybrids...!
I do hope that these car makers will spend a bit of marketing dollar toward driver training for every Hellcat, Corvette or any other high horsepower car they sell. It won't look good in the news when many are crashed due to driver's inability to control the car.
Monday, 23 October 2017
Banning of internal combustion engine cars
Ever since Elon Musk introduced Tesla it seems like the influence of reducing carbon emission has really taken off. More countries have declared that they will ban fossil fuel cars by a certain year. Some countries will impose the ban earlier than others but the direction and idea is the same. This will have a direct impact on oil companies.
By 2030 several key nations will ban all fossil fuel cars leaving only electric cars permitted to be sold. The consumption of gasoline and diesel will drop tremendously, so will the consumption of engine lubricants since electric cars do not use engine oils. Saying this, many developing countries have not declared their plans to ban fossil fuel cars but they are likely to follow suit in a matter of years. Ever since the news of the countries banning fossil fuel cars car companies are now scrambling to develop electric cars as fast as possible. They once laughed at Tesla but now they have no choice but to chase Tesla and do what Tesla has done in the last 10 years.
the influence of the oil giants have also reduced significantly and will not have such a big impact on the global economy. the development into electric power for ships and plane have also moved forward which means potentially further reduction of fossil fuel consumption. Apart from just reduction of oil consumption from the transport industry, the shift to renewal energy has accelerated with more countries using solar, wind and biomass energy systems which means the eventual demise of oil companies.
A simple scenario of a family home with solar panels on the roof which can charge the car and also provide power for the home will practically make the oil industry obsolete in time to come. The further evolution of solar technology will come and this will likely accelerate the demise of the oil companies.
Tesla and Rimac have proven that they can make exciting cars that are capable of beating fossil fuel cars. Electric is no longer boring, it is here to stay and it is the future.
By 2030 several key nations will ban all fossil fuel cars leaving only electric cars permitted to be sold. The consumption of gasoline and diesel will drop tremendously, so will the consumption of engine lubricants since electric cars do not use engine oils. Saying this, many developing countries have not declared their plans to ban fossil fuel cars but they are likely to follow suit in a matter of years. Ever since the news of the countries banning fossil fuel cars car companies are now scrambling to develop electric cars as fast as possible. They once laughed at Tesla but now they have no choice but to chase Tesla and do what Tesla has done in the last 10 years.
the influence of the oil giants have also reduced significantly and will not have such a big impact on the global economy. the development into electric power for ships and plane have also moved forward which means potentially further reduction of fossil fuel consumption. Apart from just reduction of oil consumption from the transport industry, the shift to renewal energy has accelerated with more countries using solar, wind and biomass energy systems which means the eventual demise of oil companies.
A simple scenario of a family home with solar panels on the roof which can charge the car and also provide power for the home will practically make the oil industry obsolete in time to come. The further evolution of solar technology will come and this will likely accelerate the demise of the oil companies.
Tesla and Rimac have proven that they can make exciting cars that are capable of beating fossil fuel cars. Electric is no longer boring, it is here to stay and it is the future.
Sunday, 24 September 2017
Resurgence of Volvo and MG
Volvo and MG are brands that have been around for more than 60 years with both brands now being owned by Chinese investors. The fortune for these 2 brands really turned around since the take over and having access to the world's largest car market helped tremendously.
Volvo has gone from strength to strength since the take over and the new models introduced in the last year has impressed the automotive industry worldwide. It is no longer dubbed as the boring Swedish log as the new models offer a lot of new innovative technology but yet it did not stray away from its focus on being the safest car in the world. Being safe does not necessarily mean it has to be boring and Volvo focused on shaking the boring image. The XC90, S90 and the upcoming XC60 all have plug-in hybrid technology, new impressive looking minimalist interiors and display a sense of solidity to its build quality. Volvo has definitely carved itself a unique position in the market which allows it to straddle in between BMWs and Volkswagens. It doesn't come at the high price of a BMW but it is not as cheap as the Volkswagen.
MG has also changed in the recent year since the take over and like Volvo having access to the China market made a big difference. Of course having a production base in China does help. The soon to be launched MG6 looks very impressive and would definitely help it boost the brand position in China. MG contracted out of the market before it was taken over by the Chinese but the resurgence in the brand has always been a possibility. Having much more available fund for development and design allowed MG to shine once again. Selling cars in China alone will allow it to survive but being an old brand it would only make sense for MG to once again sell in UK, Europe and Asia. MG now needs to develop more models such as SUV and large sedans to cater for a wider market.
Volvo and MG names were at risk of disappearing at one point in time. Good thing that these brands ended up in the hands of companies that would turn it around and utilise the name as well as the facility to build good cars. It would be a shame to lose such established names. The automotive industry is highly competitive and survival of the fittest the name of the game. Having just money with no plans and no vision will lead the company to nowhere.
Volvo has gone from strength to strength since the take over and the new models introduced in the last year has impressed the automotive industry worldwide. It is no longer dubbed as the boring Swedish log as the new models offer a lot of new innovative technology but yet it did not stray away from its focus on being the safest car in the world. Being safe does not necessarily mean it has to be boring and Volvo focused on shaking the boring image. The XC90, S90 and the upcoming XC60 all have plug-in hybrid technology, new impressive looking minimalist interiors and display a sense of solidity to its build quality. Volvo has definitely carved itself a unique position in the market which allows it to straddle in between BMWs and Volkswagens. It doesn't come at the high price of a BMW but it is not as cheap as the Volkswagen.
MG has also changed in the recent year since the take over and like Volvo having access to the China market made a big difference. Of course having a production base in China does help. The soon to be launched MG6 looks very impressive and would definitely help it boost the brand position in China. MG contracted out of the market before it was taken over by the Chinese but the resurgence in the brand has always been a possibility. Having much more available fund for development and design allowed MG to shine once again. Selling cars in China alone will allow it to survive but being an old brand it would only make sense for MG to once again sell in UK, Europe and Asia. MG now needs to develop more models such as SUV and large sedans to cater for a wider market.
Volvo and MG names were at risk of disappearing at one point in time. Good thing that these brands ended up in the hands of companies that would turn it around and utilise the name as well as the facility to build good cars. It would be a shame to lose such established names. The automotive industry is highly competitive and survival of the fittest the name of the game. Having just money with no plans and no vision will lead the company to nowhere.
Wednesday, 20 September 2017
Toyota's new design direction
Toyota has finally decided to move forward with a new design direction that will see them introduce new models that look more sporty and exciting. They will do away with the old "boring" designs as instructed by the President himself Akio Toyoda. This has come very late but better late than never. It is clear that Toyota lost a lot of customer in the recent years due to their ultra conservative approach. The older generation who used to buy Toyota cars because they were made by Toyota are slowly dying off and sticking to boring traditional designs is a death wish for Toyota.
Honda, Nissan and Mazda took massive swipes at Toyota for being too conservative and it has paid dividends for these 3 cars companies. Many younger buyers jumped to better and fresher designed cars. Designing boring and conservative cars are no longer acceptable. Toyota realised this and engaged a non Japanese designer which has put a fresher look to it. Some of his designs have been questionable but he is trying to make a difference. Just like Chris Bangle made some controversial designs with BMW during his time but it allowed the brand to stand out. Love it or hate it designing a car is not easy but if it is able to stand out (without being too ugly) it will make a statement for the brand image.
Subaru in the past used to design very ugly cars but of late their car designs have improved and are less ugly and more acceptable with the wider audience. This has translated to better sales worldwide and improved its brand image.
Toyota will definitely stand to gain more from this upcoming new image and help it compete head on with Nissan, Mazda, and Honda. The design direction constantly change and in order to keep up one needs to be ahead of the game.
The soon to be launched Supra looks amazing and will be something Toyota to be proud of.
Honda, Nissan and Mazda took massive swipes at Toyota for being too conservative and it has paid dividends for these 3 cars companies. Many younger buyers jumped to better and fresher designed cars. Designing boring and conservative cars are no longer acceptable. Toyota realised this and engaged a non Japanese designer which has put a fresher look to it. Some of his designs have been questionable but he is trying to make a difference. Just like Chris Bangle made some controversial designs with BMW during his time but it allowed the brand to stand out. Love it or hate it designing a car is not easy but if it is able to stand out (without being too ugly) it will make a statement for the brand image.
Subaru in the past used to design very ugly cars but of late their car designs have improved and are less ugly and more acceptable with the wider audience. This has translated to better sales worldwide and improved its brand image.
Toyota will definitely stand to gain more from this upcoming new image and help it compete head on with Nissan, Mazda, and Honda. The design direction constantly change and in order to keep up one needs to be ahead of the game.
The soon to be launched Supra looks amazing and will be something Toyota to be proud of.
Monday, 4 September 2017
Ford Fusion Hybrid (Ford Mondeo outside USA)
I recently rented a Ford Fusion Hybrid while on a business trip in Los Angeles. The car itself was very comfortable but it seemed a bit different from Japanese or Korean hybrids. The Fusion was based on a 2.0 litre gasoline engine with a parallel hybrid system. The energy recovery was good and the batteries charged up very efficiently when you are off throttle or coasting or while braking. The battery pack wasn't big and it didn't really offer much of a performance boost. The car's performance on paper showed 188hp which is quite low for a hybrid but I believe Ford was aiming more at fuel economy rather than performance.
The car's MPG meter consistently showed 44MPG (US gallon) which was quite good. A full tank had 14 gallons and I managed 500 miles before I refuelled (I estimate that the fuel tank had about 2 gallon left before I refuelled). Considering that driving in LA we spend a lot of time on freeways the fuel economy on this car was good. The interior was typical Ford design with a special rotary knob gear selector (similar to Land Rover and Jaguar). I felt that Ford still had some catching up to do in the hybrid department since it is still not quite as good as the Camry Hybrid. The switch between electric power and gasoline engine power was quite seamless and often it was not noticeable. I would appreciate if the car had more power and torque because quite often when the car was accelerating to meet the freeway speeds from an on-ramp the car felt slow.
Other hybrids like the Camry or the Hyundai Sonata had much more punch compared to the Ford. Delivering good fuel economy does not have to come at the expense of performance as demonstrated by other hybrids. I feel that Ford pushed a little too far into the fuel economy direction and forgot about extracting more performance.
It would seem like Ford would need another generation of development before it was on par with Toyota, Honda or even Hyundai when it comes to making hybrids. Nevertheless it is still a good effort by Ford and they needed to jump on the bandwagon to show that their cars are fuel efficient and can compete with others. Since diesel cars are still not popular in America going with a diesel hybrid would be out of the question. Mercedes's E300 Diesel Hybrid is probably the most fuel efficient hybrid available now. Diesel engine is already more fuel efficient than gasoline engine combined with further fuel savings with the electric motor. The combined performance is nothing short of impressive with 205hp and 500Nm of torque. A single tank of diesel can stretch up to 1000 miles which is more impressive than any other gasoline hybrid.
If Ford wants to make a real statement about fuel economy it has to be radically different and do something like the Mercedes E300 diesel hybrid. Give the buyers something to really talk about and be the champion of the fuel economy game!
The car's MPG meter consistently showed 44MPG (US gallon) which was quite good. A full tank had 14 gallons and I managed 500 miles before I refuelled (I estimate that the fuel tank had about 2 gallon left before I refuelled). Considering that driving in LA we spend a lot of time on freeways the fuel economy on this car was good. The interior was typical Ford design with a special rotary knob gear selector (similar to Land Rover and Jaguar). I felt that Ford still had some catching up to do in the hybrid department since it is still not quite as good as the Camry Hybrid. The switch between electric power and gasoline engine power was quite seamless and often it was not noticeable. I would appreciate if the car had more power and torque because quite often when the car was accelerating to meet the freeway speeds from an on-ramp the car felt slow.
Other hybrids like the Camry or the Hyundai Sonata had much more punch compared to the Ford. Delivering good fuel economy does not have to come at the expense of performance as demonstrated by other hybrids. I feel that Ford pushed a little too far into the fuel economy direction and forgot about extracting more performance.
It would seem like Ford would need another generation of development before it was on par with Toyota, Honda or even Hyundai when it comes to making hybrids. Nevertheless it is still a good effort by Ford and they needed to jump on the bandwagon to show that their cars are fuel efficient and can compete with others. Since diesel cars are still not popular in America going with a diesel hybrid would be out of the question. Mercedes's E300 Diesel Hybrid is probably the most fuel efficient hybrid available now. Diesel engine is already more fuel efficient than gasoline engine combined with further fuel savings with the electric motor. The combined performance is nothing short of impressive with 205hp and 500Nm of torque. A single tank of diesel can stretch up to 1000 miles which is more impressive than any other gasoline hybrid.
If Ford wants to make a real statement about fuel economy it has to be radically different and do something like the Mercedes E300 diesel hybrid. Give the buyers something to really talk about and be the champion of the fuel economy game!
Tuesday, 1 August 2017
Mini resurgence of sporty cars from Japan
Japan was in a bit of limbo when it came to making exciting cars. In the 1990s the Subaru WRX, Mitsubishi Evo, Honda NSX, Honda S2000, Nissan Silvia, Nissan GTR and Mazda RX-8 were hot and extremely popular. Being very tuneable made them very desirable among the young. The Japanese car makers were enjoying great success with these sporty models. Then came the 2000s where the slump him them hard. There was no real excitement coming from the Japanese car makers, Nissan had the 350Z which was not particularly exciting, Toyota had a very poor performing Celica and Honda had the Civic Type R which was not very exciting.
Now there is a glimmer of hope with Honda introducing their new Civic Type R FK8 with a 320hp engine and being very tuneable is definitely something people will look forward to. Apart from Honda, Toyota is going to launch the new Supra in the Tokyo Motorshow. The Supra is heavily based on the BMW Z4, nevertheless it is still something new from Toyota. However there is still no news from Mazda or Nissan for a new sports model. Nissan's 370Z is getting old and the GT-R's replacement is expected to be launched in 2019. Mazda have been talking about the RX-8 replacement but this is all just rumours.
While the Japanese car makers were sleeping the Germans have been capitalising on making affordable sporty cars which was once dominated by the Japanese. Even in Japan turbo charged BMW's, VW and Audis are selling well since it is easy to tune and simple plug and play chips can easily boost the car's performance. The Japanese car makers need to wake up and play catch up. Despite being slow, Toyota and Honda are making some progress especially with Honda already launching several models with turbo engines. Toyota is planning to launch several Lexus models with turbo engines.
It is better late than never but they should be less conservative and be more proactive with their approach. They have the resources to build exciting cars but it is the old timers who are in the management team that is too conservative and have lost touch with the current development of the automotive market. Playing it too safe is not good and with more European competitors moving ahead playing catch up with be a bigger task the longer they delay it. Thing may start to change one day when the old management team retires and younger more dynamic people take over in the management team.
Now there is a glimmer of hope with Honda introducing their new Civic Type R FK8 with a 320hp engine and being very tuneable is definitely something people will look forward to. Apart from Honda, Toyota is going to launch the new Supra in the Tokyo Motorshow. The Supra is heavily based on the BMW Z4, nevertheless it is still something new from Toyota. However there is still no news from Mazda or Nissan for a new sports model. Nissan's 370Z is getting old and the GT-R's replacement is expected to be launched in 2019. Mazda have been talking about the RX-8 replacement but this is all just rumours.
While the Japanese car makers were sleeping the Germans have been capitalising on making affordable sporty cars which was once dominated by the Japanese. Even in Japan turbo charged BMW's, VW and Audis are selling well since it is easy to tune and simple plug and play chips can easily boost the car's performance. The Japanese car makers need to wake up and play catch up. Despite being slow, Toyota and Honda are making some progress especially with Honda already launching several models with turbo engines. Toyota is planning to launch several Lexus models with turbo engines.
It is better late than never but they should be less conservative and be more proactive with their approach. They have the resources to build exciting cars but it is the old timers who are in the management team that is too conservative and have lost touch with the current development of the automotive market. Playing it too safe is not good and with more European competitors moving ahead playing catch up with be a bigger task the longer they delay it. Thing may start to change one day when the old management team retires and younger more dynamic people take over in the management team.
Wednesday, 19 July 2017
Toyota's sales decline in Thailand
Toyota was once the king in Thailand when it came to being the most popular car brand. The title was held for a very long time until recently when Honda overtook Toyota for top sales figures. It is very surprising since Toyota has many large factories to assemble Hilux, Vios, Fortuner and Altis models. Toyota dominated Thailand's automotive industry for decades and Honda was nowhere close to challenging Toyota for sales.
Toyota really needs to rethink its strategy for South East Asia. Honda overtook Toyota in Malaysia and now Thailand. The shift will definitely start to worry Toyota's top management since their sales figures are declining. Toyota's customers seem to prefer Honda and this shift could be down to demographics of the buyers. Toyota's buyer traditionally are from the older generation and as the buyers ages their frequency in changing cars will decline. The younger generation do not look so much at the brand and prefer trendy new designs. Toyota has been labelled as old and boring while Honda has the image of the young and sporty.
Apart from the ageing models, Toyota cannot keep relying on their brand image to sell cars. They need to move with the times and improve their designs. Honda's direction is clever and they targeted the younger buyers to great effect. Even the engines and transmission have to improve to keep up with the market trends. Toyota has always been a laggard when it comes to introducing new functions and new features into their cars. This overly conservative mindset has cost them dearly.
A good example is Mercedes Benz which once was labelled as an old man's brand however, in the last 5 years the image of Mercedes Benz has changed tremendously. The new designs are aimed at the younger buy and the trendy look of the car made a massive difference. The change in direction saw Mercedes steal many younger customers from BMW and Audi. The marketing and promotions are also aimed at the younger buyers. All this effort paid off for Mercedes and it hit record sales 2 years in a row.
Toyota can do something similar to Mercedes but the question will again fall back to its ultra conservative management. If Toyota wants to remain relevant to the younger generation it has to reinvent itself and move with the times. Merely putting a car together with an out of date engine and old gearbox will no longer cut it. Competition is much stiffer now and relying on brand alone is not going to help.
Toyota really needs to rethink its strategy for South East Asia. Honda overtook Toyota in Malaysia and now Thailand. The shift will definitely start to worry Toyota's top management since their sales figures are declining. Toyota's customers seem to prefer Honda and this shift could be down to demographics of the buyers. Toyota's buyer traditionally are from the older generation and as the buyers ages their frequency in changing cars will decline. The younger generation do not look so much at the brand and prefer trendy new designs. Toyota has been labelled as old and boring while Honda has the image of the young and sporty.
Apart from the ageing models, Toyota cannot keep relying on their brand image to sell cars. They need to move with the times and improve their designs. Honda's direction is clever and they targeted the younger buyers to great effect. Even the engines and transmission have to improve to keep up with the market trends. Toyota has always been a laggard when it comes to introducing new functions and new features into their cars. This overly conservative mindset has cost them dearly.
A good example is Mercedes Benz which once was labelled as an old man's brand however, in the last 5 years the image of Mercedes Benz has changed tremendously. The new designs are aimed at the younger buy and the trendy look of the car made a massive difference. The change in direction saw Mercedes steal many younger customers from BMW and Audi. The marketing and promotions are also aimed at the younger buyers. All this effort paid off for Mercedes and it hit record sales 2 years in a row.
Toyota can do something similar to Mercedes but the question will again fall back to its ultra conservative management. If Toyota wants to remain relevant to the younger generation it has to reinvent itself and move with the times. Merely putting a car together with an out of date engine and old gearbox will no longer cut it. Competition is much stiffer now and relying on brand alone is not going to help.
Tuesday, 11 July 2017
Poor sales of Toyota in Malaysia
Once upon a time Toyota was one of the top selling brand of cars in Malaysia. This ended last year when Honda beat it to the top selling foreign brand in Malaysia. Honda didn't just beat Toyota, it made Toyota's sales figures look low. This was unheard of and is completely new in Malaysia. The problem is with the Toyota management's approach in handling the product planning and sales in South East Asia. Among the South East Asian countries such as Thailand, Malaysia, Indonesia, Philippines and Vietnam. Malaysia has the most matured automotive industry and having English as one of its main language makes it easier for information to be shared.
Toyota took the conservative route in the last 20 years and have been dumping out of date technology into the region. The models which are sold are usually assembled in either Thailand, Malaysia (previously) and Indonesia. The models usually will carry very old engines and transmissions and old chassis. Models like the Vios may be current in Asia but the engines are over 20 years old. This is the same for the Innova. It may sell well in Indonesia but the buyers in Malaysia are becoming more discerning and they have moved on. Toyota ended up catering for the older generation that still believe in the Toyota brand regardless if the car has new or old technology.
Honda on the other hand decided to push forward with innovative designs and caught Toyota napping. The models like the HR-V and the BR-V have been a great success. The HR-V alone sold more than 11,000 units since its launch last year. The Honda Civic is also a run away success with the new design that has captured the interest of many young buyers.
Toyota is not set to introduce any new models this year and this could be a real problem for them. No new models means no new interest and this would definitely affect their sales. The new models will only introduced in 2018 and that being the new CH-R. It may be a little too late since Honda would have taken the bulk of their customers a year ahead.
I am not sure why Toyota is so conservative but with the younger generation looking for more trendy cars and innovative designs, Toyota is struggling to follow.
Toyota took the conservative route in the last 20 years and have been dumping out of date technology into the region. The models which are sold are usually assembled in either Thailand, Malaysia (previously) and Indonesia. The models usually will carry very old engines and transmissions and old chassis. Models like the Vios may be current in Asia but the engines are over 20 years old. This is the same for the Innova. It may sell well in Indonesia but the buyers in Malaysia are becoming more discerning and they have moved on. Toyota ended up catering for the older generation that still believe in the Toyota brand regardless if the car has new or old technology.
Honda on the other hand decided to push forward with innovative designs and caught Toyota napping. The models like the HR-V and the BR-V have been a great success. The HR-V alone sold more than 11,000 units since its launch last year. The Honda Civic is also a run away success with the new design that has captured the interest of many young buyers.
Toyota is not set to introduce any new models this year and this could be a real problem for them. No new models means no new interest and this would definitely affect their sales. The new models will only introduced in 2018 and that being the new CH-R. It may be a little too late since Honda would have taken the bulk of their customers a year ahead.
I am not sure why Toyota is so conservative but with the younger generation looking for more trendy cars and innovative designs, Toyota is struggling to follow.
Flying cars are coming and drones
The idea of the flying car is not new. We all saw concepts and ideas of flying cars in movies more than 30 years ago. We all even saw flying cars in cartoons like the Jetsons. Flying cars is definitely something many people are looking forward to but the pitfalls are waiting for them. Like Elon Musk said it is far too dangerous for it to work in reality. The reason for it is that in the event the engines or propulsion systems fail the car will simply fall out of the sky and crash killing the occupants and anybody directly below.
Unlike normal cars, the flying car has no road or track for it to rest on. The fail safe system is only as good as the design and the reliability of the hardware. Traffic congestion is the main reason for the flying car to potentially become a reality soon. Several companies have developed working prototypes that can land and take off almost vertically and have an operating range of up to 600km at a speed of up to 300km/h. A Chinese inventor also developed a small flying car based on drones using 4 large propellers to provide lift and forward propulsion.
I don't foresee flying cars to be a reality for at least another 15 years unless the regulators can agree on a specific safety and operating standard. It is not easy for all regulatory bodies to agree and also for legal liabilities associated with it. Some of the big companies like Google and Apple are rumoured to have invested in Flying Car technology. Chinese company that owns Geely is said to have bought over an American company that has the working flying car prototype. It is undoubtedly a bold move but is the public ready for this?
Like cars on the road, the movement and travel of the flying car has to be monitored and control. Without any flow control it cause congestion in the air as well as on the ground. I know many who would dream of using a flying car as their daily means of transport to avoid traffic especially in heavily congested cities like LA, tokyo, Manila. Bangkok, Jakarta or New York.
The cost will be a prohibiting factor for the time being since the first prototype was a quoted at over US$200,000 each. Only the rich will be able to afford it and it will take time for the cost to drop before it is more affordable for the masses.
The other possibility is the creation of a larger drone capable of carrying 1 or 2 persons. this may be a more simple approach however it will still need to be regulated. Simply building and selling it won't be practical and when accidents happen it may cause it to be banned. For now, the flying car is still nothing but a dream but this dream may become a reality sooner than we know.
Unlike normal cars, the flying car has no road or track for it to rest on. The fail safe system is only as good as the design and the reliability of the hardware. Traffic congestion is the main reason for the flying car to potentially become a reality soon. Several companies have developed working prototypes that can land and take off almost vertically and have an operating range of up to 600km at a speed of up to 300km/h. A Chinese inventor also developed a small flying car based on drones using 4 large propellers to provide lift and forward propulsion.
I don't foresee flying cars to be a reality for at least another 15 years unless the regulators can agree on a specific safety and operating standard. It is not easy for all regulatory bodies to agree and also for legal liabilities associated with it. Some of the big companies like Google and Apple are rumoured to have invested in Flying Car technology. Chinese company that owns Geely is said to have bought over an American company that has the working flying car prototype. It is undoubtedly a bold move but is the public ready for this?
Like cars on the road, the movement and travel of the flying car has to be monitored and control. Without any flow control it cause congestion in the air as well as on the ground. I know many who would dream of using a flying car as their daily means of transport to avoid traffic especially in heavily congested cities like LA, tokyo, Manila. Bangkok, Jakarta or New York.
The cost will be a prohibiting factor for the time being since the first prototype was a quoted at over US$200,000 each. Only the rich will be able to afford it and it will take time for the cost to drop before it is more affordable for the masses.
The other possibility is the creation of a larger drone capable of carrying 1 or 2 persons. this may be a more simple approach however it will still need to be regulated. Simply building and selling it won't be practical and when accidents happen it may cause it to be banned. For now, the flying car is still nothing but a dream but this dream may become a reality sooner than we know.
Tuesday, 4 July 2017
Takuma Sato's Indy 500 victory
Indy 500 is by far one of the most coveted and most prestigious race events in the racing calendar. It is also extremely gruelling since the drivers have to drive hundreds of laps and stay focused for more than 2 hours. Very often the race will have numerous big accidents and many restarts. This year's race was no exception. The main difference with this year's race is that the winner was no other than the former F1 driver Takuma Sato.
Takuma Sato has been in Indy car racing since he left F1 and did not have a lot of success winning only 1 previous race and coming extreme close to winning the Indy 500 many years ago when he spun out on the last lap trying to pass Dario Franchitti. He has since learnt a lot about patience and timing his actions. This Indy 500 win is by far his biggest victory ever and it is celebrated by Japan. Takuma Sato is the first winner of Asian descent in Indy car and first Japanese to ever with the Indy 500.
This victory also means a lot for Honda which is the main engine supplier for his team. Honda has been at the receiving end of bad news since end of 2016 for producing poor F1 engines for the Mclaren team and also the frustration that Fernando Alonso was going through in F1 and in his maiden drive in Indy car.
The victory also boosted the popularity of Indy car in Japan all of a sudden and many young up coming drivers now are more eager and more driven to excel in motorsports. The flip side of this victor is that there were some racial backlash from racist journalist and racist fans. Some went as far as to comment that the Indy 500 should have been won by a white driver since the race was held on Memorial weekend which commemorates the veterans who died in World War 2. This of course is ridiculous since the race can be won by any driver regardless of nationality or ethnicity.
Many fans were upset at the racist comments made by some sports journalist and have called for the racist journalist to be fired or at least issue an apology. Racing or motorsports should never be race based and stereotyping is also wrong. In the past many Americans would say that oriental people can't drive because there are not nearly as many Asians in motorsports and not many compete at the top level with the exception of drifting where it came from Japan and is dominated by Japanese drivers. Takuma Sato's victory also shuts up many people who would stereotype orientals can't drive. This really puts on a new topic for them to talk about and possibly start to change the mind set of the fans.
Takuma Sato has been in Indy car racing since he left F1 and did not have a lot of success winning only 1 previous race and coming extreme close to winning the Indy 500 many years ago when he spun out on the last lap trying to pass Dario Franchitti. He has since learnt a lot about patience and timing his actions. This Indy 500 win is by far his biggest victory ever and it is celebrated by Japan. Takuma Sato is the first winner of Asian descent in Indy car and first Japanese to ever with the Indy 500.
This victory also means a lot for Honda which is the main engine supplier for his team. Honda has been at the receiving end of bad news since end of 2016 for producing poor F1 engines for the Mclaren team and also the frustration that Fernando Alonso was going through in F1 and in his maiden drive in Indy car.
The victory also boosted the popularity of Indy car in Japan all of a sudden and many young up coming drivers now are more eager and more driven to excel in motorsports. The flip side of this victor is that there were some racial backlash from racist journalist and racist fans. Some went as far as to comment that the Indy 500 should have been won by a white driver since the race was held on Memorial weekend which commemorates the veterans who died in World War 2. This of course is ridiculous since the race can be won by any driver regardless of nationality or ethnicity.
Many fans were upset at the racist comments made by some sports journalist and have called for the racist journalist to be fired or at least issue an apology. Racing or motorsports should never be race based and stereotyping is also wrong. In the past many Americans would say that oriental people can't drive because there are not nearly as many Asians in motorsports and not many compete at the top level with the exception of drifting where it came from Japan and is dominated by Japanese drivers. Takuma Sato's victory also shuts up many people who would stereotype orientals can't drive. This really puts on a new topic for them to talk about and possibly start to change the mind set of the fans.
Recent spate of super car crashes in Malaysia
Hot in the news over the last few weeks have been the sudden increase in the number of high profile accidents involving super cars. The super cars that were crashed range from Ferrari 458, Porsche 911, Audi R8 and most recently Lamborghini Aventador driven by the owner's 16 year old son without a license!!
Super car crashed are nothing new and it happens all over the world. The strange thing about this recent trend is that all of a sudden social media is alive with all these postings. All this also boils down to the key point about having the money to buy but not necessarily knowing or having the skill to drive these cars, furthermore these cars shouldn't be driven like it is stolen on the streets since there are too many unknown safety factors and the presence of other traffic.
The roads in Malaysia are not the best and definitely not the safest couple that with the lack of skill to really drive the cars with so much power. 90% of these super cars on the road are bought to show off rather than to drive fast and when it is driven fast the owner doesn't know how to drive it fast in a controlled manner. Showing off is one of the key problems since the driver often will have 500-600hp at their disposal they automatically think that flooring the throttle will allow them to go faster than other cars. Being able to go fast and doing it under the right conditions are 2 different things.
There are numerous videos on Youtube to show stupidity of drivers with their cars. There are many videos showing a stream of cars coming out of a side street (possibly after a gathering or an event) and they start to accelerate hard, the car's tail starts to fish tail and slide all over and the owner cannot control it and ends up crashing it into other cars or in the bush or into a tree while many people are watching. It is not only embarrassing but it also shows the lack of self control and knowledge. There are also videos from Italy showing a guy test driving a Ferrari with some friends and ends up crashing it into a wall when he decides to show what he can do with the car.
The super car's power and torque is tremendous and it has to be treated with respect or it will bite back. The driver sometimes do not anticipate the sudden surge of power or torque which can cause the rear tyres to lose traction making the car fish tail or go side ways and which usually ends up with the driver over correcting the steering or slamming on the brakes which amplifies the problem or creates another problem.
At the end of the day, the driver who has the money to buy such powerful cars really need to get their egos checked and invest the money into driver training before showing what they can do with their powerful machines. there is no glory is crashing and definitely no glory when you kill yourself or others while trying to show off!
Super car crashed are nothing new and it happens all over the world. The strange thing about this recent trend is that all of a sudden social media is alive with all these postings. All this also boils down to the key point about having the money to buy but not necessarily knowing or having the skill to drive these cars, furthermore these cars shouldn't be driven like it is stolen on the streets since there are too many unknown safety factors and the presence of other traffic.
The roads in Malaysia are not the best and definitely not the safest couple that with the lack of skill to really drive the cars with so much power. 90% of these super cars on the road are bought to show off rather than to drive fast and when it is driven fast the owner doesn't know how to drive it fast in a controlled manner. Showing off is one of the key problems since the driver often will have 500-600hp at their disposal they automatically think that flooring the throttle will allow them to go faster than other cars. Being able to go fast and doing it under the right conditions are 2 different things.
There are numerous videos on Youtube to show stupidity of drivers with their cars. There are many videos showing a stream of cars coming out of a side street (possibly after a gathering or an event) and they start to accelerate hard, the car's tail starts to fish tail and slide all over and the owner cannot control it and ends up crashing it into other cars or in the bush or into a tree while many people are watching. It is not only embarrassing but it also shows the lack of self control and knowledge. There are also videos from Italy showing a guy test driving a Ferrari with some friends and ends up crashing it into a wall when he decides to show what he can do with the car.
The super car's power and torque is tremendous and it has to be treated with respect or it will bite back. The driver sometimes do not anticipate the sudden surge of power or torque which can cause the rear tyres to lose traction making the car fish tail or go side ways and which usually ends up with the driver over correcting the steering or slamming on the brakes which amplifies the problem or creates another problem.
At the end of the day, the driver who has the money to buy such powerful cars really need to get their egos checked and invest the money into driver training before showing what they can do with their powerful machines. there is no glory is crashing and definitely no glory when you kill yourself or others while trying to show off!
Monday, 29 May 2017
Kia Optima GT
Kia just launched the Optima GT with a 2.0 turbo delivering 242hp and 345Nm. Looks very impressive on paper but the strange thing is that the acceleration time is only 7.4 seconds to 100 km/h. The Mercedes C250 with 211hp and 350Nm does it in 6.3 seconds and the BMW 330i with 250hp and 350Nm does it in 5.9 seconds. What happened to Kia??
Being more than 1.5 seconds slower is strange since the weight of the cars are very similar. It appears that the Kia's transmission isn't as efficient as the Merc or the BMW. Kia has 6 speed while the Merc has 9 and BMW has 8. I believe the difference is from the transmission loss rather than the lack of gears.
Historically Korean makers may claim relatively high horsepower ratings in their brochures but when it comes to execution something is always missing. Some may argue that Mercedes and BMW will usually understate their actual performance figures and use wheel horsepower rather than engine horsepower rating. This could be true since some people have dyno tested BMWs to check the performance figures. There was a case where the 320d was tested on the dyno, on paper the engine power was suppose to be 177hp but on the dyno the read out at the wheels was 170+ wheel horsepower. What this means is that BMW published wheel horsepower figures rather than engine horsepower. In this case the specimen car actually had over 200hp at the engine.
If Kia published engine horsepower figure this means that the 242hp would end up being 200hp or less at the wheels. This could explain the slower acceleration times.
Not to take anything away from Kia, it is definitely a good effort by them to make the car more sporty and offer something fresh. I know Kia and Hyundai usually benchmark themselves against Japanese rivals instead of European rivals. At RM179,000 it is definitely a good alternative to the run of the mill Camry or Accord. The Optima GT is definitely more sporty looking inside and out and is definitely faster than the Camry or Accord. First the buyer needs to get over the fact that the Koreans can challenge the Japanese for sporty drive.
Being more than 1.5 seconds slower is strange since the weight of the cars are very similar. It appears that the Kia's transmission isn't as efficient as the Merc or the BMW. Kia has 6 speed while the Merc has 9 and BMW has 8. I believe the difference is from the transmission loss rather than the lack of gears.
Historically Korean makers may claim relatively high horsepower ratings in their brochures but when it comes to execution something is always missing. Some may argue that Mercedes and BMW will usually understate their actual performance figures and use wheel horsepower rather than engine horsepower rating. This could be true since some people have dyno tested BMWs to check the performance figures. There was a case where the 320d was tested on the dyno, on paper the engine power was suppose to be 177hp but on the dyno the read out at the wheels was 170+ wheel horsepower. What this means is that BMW published wheel horsepower figures rather than engine horsepower. In this case the specimen car actually had over 200hp at the engine.
If Kia published engine horsepower figure this means that the 242hp would end up being 200hp or less at the wheels. This could explain the slower acceleration times.
Not to take anything away from Kia, it is definitely a good effort by them to make the car more sporty and offer something fresh. I know Kia and Hyundai usually benchmark themselves against Japanese rivals instead of European rivals. At RM179,000 it is definitely a good alternative to the run of the mill Camry or Accord. The Optima GT is definitely more sporty looking inside and out and is definitely faster than the Camry or Accord. First the buyer needs to get over the fact that the Koreans can challenge the Japanese for sporty drive.
Sunday, 28 May 2017
Proton and Geely
Looks like the rumours of Geely buying 49.9% of Proton is materialising. Proton is really in a financial rut and have no choice but to sell a large part to Geely. Dr. Mahathir the founder and creator of Proton is crying about it. Despite all this the current Malaysian Government is not willing to assist Proton any further. The relation between the present government and Dr. Mahathir is at its lowest which will literally accelerate the demise of Proton. Time and time again Proton has asked the Government for money and with so many prior financial injections there was no improvement made to the way Proton conducted business.
Proton has become a real burden to the Malaysian public. The original concept was good however with the way Dr. Mahathir handled business he only knew how to create protective business environment for Proton. It had an unfair advantage over competing car makers and this made them complacent over the years. Proton never improved itself and did not change its ways since the 1980s. Every other car maker has moved forward with product development and expanded well beyond their own shores.
When the news broke out that Proton would sell 49% to Geely and Dr. Mahathir was seen as a very unhappy person, the public was not sympathetic to him at all. In fact most Malaysians cursed him for creating Proton and forcing the public to buy cars at ridiculous prices and also creating the AP system that only enriched a few businessmen that were close to him. Seeing that the current turn of events have made Proton look like a useless company, everyone is waiting to see what will happen. Will Geely invest heavily to turn Proton around or will they eventually pull out. Geely for sure will not accept the way the current Proton management runs the business and they would want the corrupt management to be kicked out. Proton will also have to beg for money from Geely since the government will not be providing any more funding. Proton would have to listen to Geely's management if they want to have funds to keep running the business. Geely on the other hand will be able to expand into Malaysia and South East Asia very quickly.
The question in Malaysia is whether Malaysians will buy Geely cars since China made / China branded cars have not been well received. Geely's cars have improved tremendously in the last 10 years and ever since buying over Volvo, Geely has made big steps forward in terms of product development. Some technology transfer has naturally taken place and this can only benefit Geely. As an observer I do hope that the bulk of the corrupt Proton management will be kicked out once and for all. They have only contributed to the demise of the company and milked the company for all its got at the expense of Malaysian tax payers.
Proton has become a real burden to the Malaysian public. The original concept was good however with the way Dr. Mahathir handled business he only knew how to create protective business environment for Proton. It had an unfair advantage over competing car makers and this made them complacent over the years. Proton never improved itself and did not change its ways since the 1980s. Every other car maker has moved forward with product development and expanded well beyond their own shores.
When the news broke out that Proton would sell 49% to Geely and Dr. Mahathir was seen as a very unhappy person, the public was not sympathetic to him at all. In fact most Malaysians cursed him for creating Proton and forcing the public to buy cars at ridiculous prices and also creating the AP system that only enriched a few businessmen that were close to him. Seeing that the current turn of events have made Proton look like a useless company, everyone is waiting to see what will happen. Will Geely invest heavily to turn Proton around or will they eventually pull out. Geely for sure will not accept the way the current Proton management runs the business and they would want the corrupt management to be kicked out. Proton will also have to beg for money from Geely since the government will not be providing any more funding. Proton would have to listen to Geely's management if they want to have funds to keep running the business. Geely on the other hand will be able to expand into Malaysia and South East Asia very quickly.
The question in Malaysia is whether Malaysians will buy Geely cars since China made / China branded cars have not been well received. Geely's cars have improved tremendously in the last 10 years and ever since buying over Volvo, Geely has made big steps forward in terms of product development. Some technology transfer has naturally taken place and this can only benefit Geely. As an observer I do hope that the bulk of the corrupt Proton management will be kicked out once and for all. They have only contributed to the demise of the company and milked the company for all its got at the expense of Malaysian tax payers.
Wednesday, 12 April 2017
Dodge Challenger SRT Demon - too much power?
Looks like Dodge is really going all out with the power craze. Last year they released the Hellcat pushing the car's power to 720hp. Now they have gone one step further and boosted the car to 840hp!! The Hellcat was popular no doubt about it but many people couldn't really handle the power. Dodge was smart to offer the owners 2 sets of keys, one which will allow the car to run on a lower power setting and another one for maximum power. Many owners thought that having a tonne of power they can beat anything on the drag strip but they were so wrong!!
Many of the Hellcat owners were humiliated at the drag strip by Tesla Model S and many other 4WD equipped sports cars. The Hellcat struggled to get power down since the rear tires were not wide enough.
The new SRT Demon has been improved and seems like almost no expense has been spared with air conditioning cooled air intake system and much wider rear drag radials! This will no doubt make the car faster to launch from the drag strip but driving it on a road course it will require skill to control 840hp! Seeing from the numerous accidents and the lack of understanding from the people who will buy this type of car, it could be a recipe for disaster. Dodge acknowledges the potential danger of handing the keys of a 840hp monster to a person with little driving experience or have no idea how to control such a beast, Dodge offers a driving course for the new buyers. This is definitely needed since going fast in a straight line is fine but going fast in a turn and not killing yourself is another thing.
Male ego can often be the root of the problem. Having the money to buy a high powered car is one thing but knowing how to drive it is completely different. Very often people who buy such high powered cars are buying it out of ego. Can they really handle so much power? I have 2 friends who were ex-race instructors and the feedback they received from teaching hundreds of students is that ego is the real problem. Many male students refuse to listen to instructions and think that more power will help them go faster. They don't even realise that using the right tires will make a huge difference. Many struggle to follow instructions on when to apply the brakes, where to turn and when to apply the throttle. Without sufficient car control and understanding the basics of how to control the car any car with a lot of power will be dangerous.
For those who have the skill to drive a car of this performance level it will definitely a lot of fun. For those who don't possess the skill to drive a car of this performance level it is like giving a gun to a child!
Many of the Hellcat owners were humiliated at the drag strip by Tesla Model S and many other 4WD equipped sports cars. The Hellcat struggled to get power down since the rear tires were not wide enough.
The new SRT Demon has been improved and seems like almost no expense has been spared with air conditioning cooled air intake system and much wider rear drag radials! This will no doubt make the car faster to launch from the drag strip but driving it on a road course it will require skill to control 840hp! Seeing from the numerous accidents and the lack of understanding from the people who will buy this type of car, it could be a recipe for disaster. Dodge acknowledges the potential danger of handing the keys of a 840hp monster to a person with little driving experience or have no idea how to control such a beast, Dodge offers a driving course for the new buyers. This is definitely needed since going fast in a straight line is fine but going fast in a turn and not killing yourself is another thing.
Male ego can often be the root of the problem. Having the money to buy a high powered car is one thing but knowing how to drive it is completely different. Very often people who buy such high powered cars are buying it out of ego. Can they really handle so much power? I have 2 friends who were ex-race instructors and the feedback they received from teaching hundreds of students is that ego is the real problem. Many male students refuse to listen to instructions and think that more power will help them go faster. They don't even realise that using the right tires will make a huge difference. Many struggle to follow instructions on when to apply the brakes, where to turn and when to apply the throttle. Without sufficient car control and understanding the basics of how to control the car any car with a lot of power will be dangerous.
For those who have the skill to drive a car of this performance level it will definitely a lot of fun. For those who don't possess the skill to drive a car of this performance level it is like giving a gun to a child!
Tuesday, 11 April 2017
Bugatti Chiron
Bugatti is a legendary name that went on a sabbatical for decades until it resurfaced again in 2005 showing that it is not dead and is capable of making hypercars. The Veyron was born and was the first production car that had 1000hp. It was unheard of at that time and people with fat cheque books were more than happy to pay this money to have a 1000hp under their right foot. Fast forward 12 years and Bugatti is back again with another model. This time it is called the Chiron. It is nearly ready for production and only a limited of test units are on display and under live testing.
Why did Bugatti develop the Chiron? Bugatti no longer held the edge over the other super car makers because Ferrari have since introduced the LaFerrari with 900+hp, Mclaren have introduced their P1 with 900+hp and Porsche introduced the 918 with 800+hp. All of this have made the Veyron look old. Bugatti had to move the yardstick more further and give it that exclusivity. 1000hp is no longer magical, it has become normal. The Chiron have moved the yardstick much further now with its 1500hp output. The car still comes with 8 litre W16 quad turbo engine but much have been revised to allow for greater efficiency. the handling of the car has also tremendously improved making it much more playable and nimble and not behave like a big drag strip monster.
The Chiron's interior design is also current and oozes with style. The car is not capable of 260mph and there is speculation that it may eventually achieve 300mph over its lifespan since Bugatti will undoubtedly tweak the car for further performance improvements. The price tag for the car is 2 million British pounds and this is by far the most expensive hypercar on sale now.
Buying a Bugatti is like joining an exclusive club and the membership's perk is the ability to go well over 200mph! I am very sure we will see many Chiron's in Dubai, Shanghai and Monte Carlo in the very near future.
After the release of the Chiron the super car makers like Ferrari and Mclaren will be a rush to introduce more powerful cars to compete in this exclusive hypercar market segment.
Why did Bugatti develop the Chiron? Bugatti no longer held the edge over the other super car makers because Ferrari have since introduced the LaFerrari with 900+hp, Mclaren have introduced their P1 with 900+hp and Porsche introduced the 918 with 800+hp. All of this have made the Veyron look old. Bugatti had to move the yardstick more further and give it that exclusivity. 1000hp is no longer magical, it has become normal. The Chiron have moved the yardstick much further now with its 1500hp output. The car still comes with 8 litre W16 quad turbo engine but much have been revised to allow for greater efficiency. the handling of the car has also tremendously improved making it much more playable and nimble and not behave like a big drag strip monster.
The Chiron's interior design is also current and oozes with style. The car is not capable of 260mph and there is speculation that it may eventually achieve 300mph over its lifespan since Bugatti will undoubtedly tweak the car for further performance improvements. The price tag for the car is 2 million British pounds and this is by far the most expensive hypercar on sale now.
Buying a Bugatti is like joining an exclusive club and the membership's perk is the ability to go well over 200mph! I am very sure we will see many Chiron's in Dubai, Shanghai and Monte Carlo in the very near future.
After the release of the Chiron the super car makers like Ferrari and Mclaren will be a rush to introduce more powerful cars to compete in this exclusive hypercar market segment.
Tuesday, 4 April 2017
Proton is dying and no one is buying over the company
Proton has been on the death bed for years and every time there is a potential saviour in sight the deal goes sour one way or another. Quite often the would be potential partner is a larger car foreign company looking to utilise Malaysia as a production base to capitalise on the Asean Free Trade Agreement and supply cars to other South East Asian countries such as Thailand, Philippines, Indonesia, Vietnam and Singapore. During the initial talks everything looks positive until further investigation by the potential partner will uncover massive levels of corruption and other inadequacies.
Malaysia is in a strategic location to have a factory to manufacture or assemble cars to be supplied to neighbouring countries but Proton may not be the right partner. There are just too many 'devils' in the company that have been enjoying kick backs from suppliers for decades. This culture of corruption is so entrenched that it has been systematically destroying the company from inside. No business minded car company would accept this and if they were to partake in any joint venture these 'devils' would have to be removed from the company. However, so far Proton management has not been willing to remove these individual because many of them are in the management team.
VW had done their due diligence many years ago when they considered partnering with Proton but seeing this corruption based corporate culture VW didn't want anything to do with it. Now that Peugeot and Geely were considering to buy Proton, the deals have gone sour and Geely has backed out. It is very likely that upon discovering the levels of corruption and Proton's management's refusal to remove the corrupt members of the management Geely would not entertain working in such an environment. Peugeot is still in talks with Proton but it is also likely that they will back out too.
Proton will end up rotting and closing down before long since the Malaysian government no longer have the funds to bail out Proton after doing so numerous times. With each bail out or cash injection, nothing happened and the money just ended up in the pockets of a select few.
Without further investment or securing a joint venture partner or a buy out, Proton will not survive another 10 years. Their stock levels are extremely high since many people refuse to buy their cars and the operational costs are killing the company. The new models with higher margins are no popular. Only the basic Saga model is selling but that model alone is not sufficient to keep the company afloat.
Malaysia is in a strategic location to have a factory to manufacture or assemble cars to be supplied to neighbouring countries but Proton may not be the right partner. There are just too many 'devils' in the company that have been enjoying kick backs from suppliers for decades. This culture of corruption is so entrenched that it has been systematically destroying the company from inside. No business minded car company would accept this and if they were to partake in any joint venture these 'devils' would have to be removed from the company. However, so far Proton management has not been willing to remove these individual because many of them are in the management team.
VW had done their due diligence many years ago when they considered partnering with Proton but seeing this corruption based corporate culture VW didn't want anything to do with it. Now that Peugeot and Geely were considering to buy Proton, the deals have gone sour and Geely has backed out. It is very likely that upon discovering the levels of corruption and Proton's management's refusal to remove the corrupt members of the management Geely would not entertain working in such an environment. Peugeot is still in talks with Proton but it is also likely that they will back out too.
Proton will end up rotting and closing down before long since the Malaysian government no longer have the funds to bail out Proton after doing so numerous times. With each bail out or cash injection, nothing happened and the money just ended up in the pockets of a select few.
Without further investment or securing a joint venture partner or a buy out, Proton will not survive another 10 years. Their stock levels are extremely high since many people refuse to buy their cars and the operational costs are killing the company. The new models with higher margins are no popular. Only the basic Saga model is selling but that model alone is not sufficient to keep the company afloat.
Monday, 3 April 2017
VW just bought Ferrari!
The biggest news to hit the automotive industry last week was when VW bought 90% of Ferrari essentially taking control of the company. It is was one of the most amazing news since VW is the largest automotive group in the world and by buying Ferrari it just expands their portfolio further. VW already owns Audi, Porsche, Lamborghini and Bugatti. Adding Ferrari would make VW the largest luxury car brand owner in the world.
This also makes any other rival tiny in perspective. Ferrari has brand value, F1 technology and a loyal following of elite customers. Rivals like Toyota are nowhere near since Toyota's most prestigious brand is only Lexus which many know is a glorified Toyota. General Motors, Ford, PSA and Fiat are now far behind VW.
Porsche and Lamborghini have been enjoying growth for the last 15 years which contributes to VW's group business. Bugatti also recently had a resurgence since the introduction of the new Chiron model.
There is also rumours of VW or Audi entering F1. VW has stayed away from F1 thus far and this news is definitely something interesting. VW has enjoyed success with selling cars without getting involved in F1. In fact the only companies to really benefit from road car sales stemming from involvement in F1 is Ferrari and Mercedes Benz. Renault and Honda have not benefitted much in the last few years despite Renault winning with Redbull few years ago.
Toyota flopped in their F1 campaign before pulling the plug and Honda looks like it is potentially facing the same fate. Several full season in F1 and not a single victory to show for it. F1 is a cruel sport and not every car company is cut out for it. Even BMW only managed several victories with Williams before quitting.
This also makes any other rival tiny in perspective. Ferrari has brand value, F1 technology and a loyal following of elite customers. Rivals like Toyota are nowhere near since Toyota's most prestigious brand is only Lexus which many know is a glorified Toyota. General Motors, Ford, PSA and Fiat are now far behind VW.
Porsche and Lamborghini have been enjoying growth for the last 15 years which contributes to VW's group business. Bugatti also recently had a resurgence since the introduction of the new Chiron model.
There is also rumours of VW or Audi entering F1. VW has stayed away from F1 thus far and this news is definitely something interesting. VW has enjoyed success with selling cars without getting involved in F1. In fact the only companies to really benefit from road car sales stemming from involvement in F1 is Ferrari and Mercedes Benz. Renault and Honda have not benefitted much in the last few years despite Renault winning with Redbull few years ago.
Toyota flopped in their F1 campaign before pulling the plug and Honda looks like it is potentially facing the same fate. Several full season in F1 and not a single victory to show for it. F1 is a cruel sport and not every car company is cut out for it. Even BMW only managed several victories with Williams before quitting.
Monday, 23 January 2017
End of the road for Faraday Friday?
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.
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.
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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