GM Pulls Out from JV with DRB-Hicom

DRB-HICOM Bhd and General Motors Corp (GM) have mutually agreed to part company. Starting 1 January 2010, DRB-HICOM would no longer import GM cars into Malaysia, albeit Chevrolets would continue to be imported and sold.

I can't help but think that this has something to do with the lack of a level playing field in Malaysia's automotive sector. With so much done to protect a company like Proton from foreign competitors, other industry players have to struggle with slim margins and low volume sales.

As it is, GM is facing financial difficulties at home (back in the US). This makes it all the more difficult for it to continue being a big player in the Malaysian market.

What a lost opportunity this is. GM had expressed interest in setting up a manufacturing base in Malaysia, much like it has in Thailand. Clearly, this is not going to happen any time soon; not while a company like Proton continues to rely on market protectionism at the expense of foreign direct investment.

How can we expect foreign investors to come to Malaysia to set up an automotive manufacturing base if we continue to molly coddle Proton? Malaysia has already lost two decades of auto-manufacturing lead to neighbouring countries. Another lost decade may reduce Malaysia to a state of insignificance as far as major players in the automotive industry are concerned.

The writing is on the wall for Malaysia's automotive sector. Its contribution to government revenue continues to pale in significance compared to other sectors.

How much longer should this be ignored?

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Addendum: Reportedly, car sales in Malaysia number around 500,000 units a year. Under GM's partnership with DRB-HICOM, Chevrolet sales would be more than 3,000 units in a good year. Sales have since fallen to fewer than 1,000 units.

Why is this not surprising, especially when Proton continues to have preferential treatment? Not only is this a turn off for foreign investors, Malaysian consumers also suffer from artificially inflated car prices.

It is rumoured that Naza is now interested to step in where DRB-HICOM left off. Well, good luck with that.

See http://www.btimes.com.my/articles/gmos-2/Article/

My Son the Musician Buys His First Electric Guitar

My son bought his first electric guitar recently (of course with a bit of help from me). He's been wanting one for so long.

His desire for one peaked when he began listening more to Lee Ritenour's electric guitar music. And now that he has his own electric guitar, he's experimenting with jazz guitar sounds and accoustic guitar music.

The video is a sample of one of his practice sessions. He's playing Don Ross' accoustic guitar piece "So Little Time" and bringing out the jazz guitar feel to the song.

Enjoy!

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Addendum: How is this relevant to Cars Malaysia? Well, this is the kind of music that I like to listen to while cruising at high speeds along highways. Concentration is improved due to the relaxing sounds of instrumental guitar music. Try it out :)

My Beef with Proton - Over Reliance on Market Protection

I have vivid memories of my Proton Waja 1.6L(M). It was filled with all sorts of defects, which I had to address over a two year period.

At the same time, it was the first ever mid-range car I ever owned. And I put in time, effort and loads of money to do it up, so that it could more than keep up with more powerful cars as well as look stylish while doing it.

Would I go out to buy another Proton now that I'm able to afford far more expensive cars? After careful consideration, the answer to that is "not likely".

There are several "national car" companies to choose from. While Proton may offer relatively cheaper options, I'm pretty annoyed by the fact that it's Proton's inability to fully compete in an open market that's causing car prices in Malaysia to be inflated artificially.

Just to spite this complacent company, I would opt for other local makes like Perodua, Naza and even Innokom, because I can. Proton has become too comfortable with over two decades of protection and is, thus, rightfully branded complacent, and deserves to be shunned.

While the protection Proton enjoys also benefits other local marquees, it does not change the fact that domestic car prices are artificially inflated mainly because of Proton's inability to compete in an open market more than anyone else.

Thus, market protection should be removed.

Perodua has Toyota's backing. Remove the local market protection and it could simply adapt by selling more re-badged Toyota's instead of just a handful of models.

Naza has Kia and Peugeot backing. Remove local market protection and it could simply adapt by selling more re-badged Kias and Peugeots.

Inokom has Hyundai backing. Remove local market protection... well, you get the idea.

As for Proton, remove local market protection and it'll sell more Proton cars? Not likely or at least not without a strong partner to back it.

For market protection removal to work in Proton's favour, it needs a strong partner like VW or whoever else that's in the market to buy into Proton. The objective is so that Proton becomes lean and far more competitive.

Yes, there will be changes, which could also include a management buy-out. In the end, the government and the rakyat stand to gain from higher revenue and profits from the sale of Protons and other locally assembled cars, both domestic and overseas.

Foreign direct investment would also increase because of the new breath of life given to the Malaysian automotive industry.

Also, Proton prices would be comparable to those sold more cheaply overseas currently, that is relative to the cost of living.

So, will I buy another Proton? Until there is significant reform of the local automotive industry, the answer to that is again "not likely".

At the very least, I'd feel satisfied that I'm doing my part to press for change.

Tie-up with Mercedes GP - Go, Go, PETRONAS!

With so much negativity hurled at PETRONAS lately, it's good to know that an overwhelming majority of Internet-connected Malaysians are behind the national oil company's move to sponsor the Mercedes GP "Silver Arrow" team, whose principal driver is none other than 7-time F1 champion Michael Schumacher. Check out the reader feedback section at Paultan.org and see for yourself (click on the links below).

The Internet, as we know, is filled with left-wing supporters who are very vocal in expressing their disagreements with the government of Malaysia. When it comes to PETRONAS' tie-up with the Silver Arrow team, such people are generally full of praise.

Perhaps the move by PETRONAS appears left-wing enough that it merits their praise. Or perhaps, they see it for what it really is - a purely commercial or business move on PETRONAS' part to further enhance its brand value through the Silver Arrow tie-up.

By backing a marquee like Mercedes, PETRONAS is enhancing the attractiveness of its line of lubes, particularly the Syntium line. In layman terms, if Syntium is good enough for a Mercedes, then it's more than good enough for any other car.

What's more, with Schumacher adorning the PETRONAS logo, the multi-fold returns on investment for PETRONAS goes almost without saying.

Of course, some people are not too happy. One of them is Alex Yoong who reportedly said that he is ashamed because of the PETRONAS tie-up with Mercedes GP.

Well, he has been bashed left,right and centre for it - I need not add further to the bashing here.

I just want to point out that, as per its mission statement, PETRONAS is a business entity first and foremost. Hence, it needs to do what it must to stay afloat.

At the same time, its mission objective is to contribute to the well-being of the people and nation. It has done this by giving back more than RM471 billion since its incorporation in 1974 - a feat unmatched by other Malaysian corporations.

And it's not doing it simply by taking and selling oil and gas from Malaysian waters - revenue from international operations in 2009 surpassed the RM100 billion mark and continues to be the biggest contributor to PETRONAS' revenue.

Over and above that, PETRONAS is still doing its part to support Malaysia's interest in F1 by sponsoring the Malaysian round. So, no one, not Alex Yoong, not anyone has the right to shame PETRONAS for not sponsoring the 1Malaysia F1 Team (1MF1T).

F1 is a business. If Tony Fernandes et al don't have a profit model for 1MF1T, then they have no business being involved in F1.

If Fernandes is able to pull another rabbit out the hat for 1MF1T the way he did for Air Asia, then he can can come back to PETRONAS in a couple of years to present a tie-up proposal. At the same time, if 1MF1T turns out to be a winner, he wouldn't have to because there would be others for Fernandes to consider.

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Addendum - click on the following links to Paultan.org
http://paultan.org/2009/12/22/alex-yoong-ashamed-with-petronas-over-mercedes-gp-sponsorship-deal/
http://paultan.org/2009/12/23/mercedes-gp-petronas-formula-one-team-official-renderings/#comment-285963

Ford Mondeo - Oh! Dear. Oh! Dearo...

As as Fordie (Ford car enthusiast), I get very excited about almost all new things to do with Ford cars. I would usually spend quite a bit of time at the Ford service centre in Petaling Jaya, Selangor looking at the new line of Ford cars on sale.

And when the first Ford Mondeos were being prepped for official launch in Malaysia, I took the opportunity to snap picture after picture of the new cars using my phone camera.

Then, I found out the selling price of a Mondeo, which is RM178,888 on the road without insurance, and I got TURNED OFF.

What the hey? This is typical of Ford in Malaysia. Ford cars are brought in at a premium with apparent little regard for what the nearest competitor is offering - in this case, the classy and award winning Mazda 6.

Yes, the Ford Mondeo 2.3L has its little extras, chief among which are the six speed auto and control blade suspension system (known for giving Ford cars superior handling).

So does the Maza 6 have its little extras, chief among which is a more powerful engine and, arguably, styling that's more fresh looking.

What's more, the Mazda 6 is cheaper at RM174,000 for the 2.5 litre model.

Now, both cars are expensive to maintain - Mazda parts are known for being on the costly side and the same goes for Ford cars, if not especially so.

In the end, the tussle would be between classy freshness and expensive staleness. In this case, I'd personally go for the classy and more fresh looking Mazda 6 almost any day.

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Addendum: The Mondeos featured above are actually the hatchback versions that are not yet on sale in Malaysia. On the four door 2.3L version is on sale in Malaysia.

BTN is Alright, Some People in it May Not Be

The whole BTN fiasco is a long time coming.

I remember when I attended a BTN course during my college days, one of the songs I had to sing had the line, "Melayu kan gagah di nusantara." Personally, I had no problem with it, considering that I am as much Malay as I am Chinese by bloodline (and culturally, more Malay).

At the same time, I couldn't help notice the look of despise among my Chinese college mates who thought that the song belittled them, because they were not Malay.

Nearly a decade later, my former mentor Tan Sri Hj Subhan Bin Jasmon became the Director of BTN.

He too is both Malay and Chinese by bloodline, and if I know him as well as I think I do, I don't think he would have allowed such a song to be sung again.

At the same time, no matter how well-intended the top management of BTN may have been, BTN is made up of people and some people may have become overzealous in expressing their Malay-ness. And now the issue has come back to bite the whole of BTN.

I hope the good people in BTN do not get tarred along with those who deserve to be told off.

Prince Court Medical Centre - So Good to be At, You Almost Wish You Could Stay

Hospitals aren't usually places you'd want to stay for very long. They're places you go to as a last resort in order to get your health back up.

So, imagine yourself going to a hospital that looks like a hotel. It's so great to be in, you actually don't mind staying longer.

Well, that's what Prince Court Medical Centre (PCMC) is like. The crown jewel of Malaysia's private medical sector, it has many of Malaysia's best doctors and many of the best and latest medical equipment money can buy.

Best of all, the medical fees at PCMC are comparable to those of Subang Jaya Medical Centre (SJMC), Gleneagles Medical Centre and Pantai Medical Centre. So, don't let the five star hotel ambiance scare you.

And don't let rumours sway you either. Apparently, some people have said that PCMC's doctors are 'not so good'.

What a laugh!

You don't get hired to work as a consultant at PCMC if your credentials aren't above board. Lest we forget, these consultants include those who also work or have worked at SJMC, Gleneagles and Pantai.

If you can afford to go to the private sector for medical services, PCMC should be at the top your list of considerations.