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.
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