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.

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!

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?!

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.

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.

The big drop in sales for Toyota cars in Malaysia

In 2016 it has been tough for many car makers with many of them seeing significant reduction in sales volume compared to 2015. This can be blamed on rising cost of living and the drop in the local currency against the US dollar. The economic contraction is very evident and banks are also issuing fewer car loans since they need to protect themselves from losing money from repossession. It is a difficult situation to be in. However, not all car makers are seeing big reductions in car sales. Honda for one has been enjoying records sales and same for Mercedes Benz. The ones that has been suffering the most surprisingly has been Toyota.
Toyota being one of the market leaders for many years for the non-local car brand suffered significant reduction in sales volume in 2016. The sales volume dropped by more than 30% and this allowed Honda to take the lead which is unprecedented. Honda has always been a distant second to Toyota but not any more. The new models such as the HRV and the new Civic really took the fight to Toyota. Despite Toyota introducing the new Hilux and Fortuner models it was not enough to keep the lead. The popular models such as the Vios and Camry lost a lot of ground when compared to the City and the Accord. This hurt Toyota massively and they looked out of sorts not knowing what to do and how to recover the lost sales. Toyota had to quickly do a mid life cycle face lift within 18 months of the car's launch. This is unheard of.
Toyota can no longer rest on their laurels and believe that the brand name alone can keep them at the top. The models introduced by Toyota have been very out of date and looked aged. The younger buyers are looking for fresher and newer designs which Honda has cleverly benefited from. It is unsure if the models introduced by Toyota was selected by Thailand or Japan but it appears that the better and newer models are held in Japan. Toyota cannot keep having this type of attitude if it is to lead the market once again.
Hopefully Toyota will learn from Nokia's mistake and not think that it is too big to fail. With the power of the internet and mobility, the younger generation are the ones who will be buying the cars and if Toyota cannot offer models that will appeal to the younger generation then Toyota's future will be doomed.

Mazda did a turn around one generation ago with their Kodo designed models and it has paid dividends. Toyota really needs to think about this approach and not be so ultra conservative. Conservative business has been left in the dust, it is time to be up to date or even ahead of its time.

the number of gears in transmissions

In the past 4 gears was the norm for car transmissions and this stayed for a long time from the 1970s to the 1980s then a gradual change took place where car transmissions moved on to have 5 gears. This stayed the same for over a decade until a few car companies decided to offer 6 gears. This was limited to some top end luxury cars such as BMW, Mercedes and Porsche.

Since the mid 2000 where the oil price shot up every car maker was rushing to introduce cars that offer better fuel economy and seeing that it was difficult to squeeze more efficiency from an engine the next best route was to improve the transmission by offering more gears. It was proven that with more gears and lower gearing at cruising speed the engine would rev lower thus saving fuel. This concept did make sense but it was somehow got carried away with car maker nows push up to 10 gears in their transmission system. BMW started using their 8 speed automatic in the F10 5 series and F30 3 series, then came Mercedes with their 9 speed automatic in the S and E Class models. Ford and Honda and Hyundai took one step further by introducing 10 gears.

Honda was previously focused on using the CVT system but it was not well received and had problems. Honda filed for patent for their triple clutch 10 speed transmission making it the first in the world triple clutch 10 speed. Ford and Hyundai were using conventional automatic transmission but adding the gears to make up 10. With this number of gears the transmission would have to be automatic as it would not be practical to swap gears manually. Porsche pushed the maximum number of gears for manual transmission to 7 and this was getting troublesome. With so many gears the driver will be spending too much time holding onto the gear level changing gears all the time. It didn't make practical sense.

Transmission systems with high number of gears have been around for a long time but those are installed in trucks and buses where the truck or bus has to lug heavy weight and being diesel the rev band is very short. the bus or truck had to be in the power band to be able to lug the heavy payload.

On the flip side electric cars have no gears and is able to run without using a conventional transmission. It will be interesting to see how far transmission technology will change in the near future.