DRB-Hicom to Buy Khazanah Stake - The Proton Saga Continues

Yes, the secret is out. DRB-Hicom is buying out Khazanah's stake in Proton.

Was it such a big surprise? Not really. It was bound to happen.

Proton needs to be weaned off its "subsidies" or rather the protection it receives from the Government that causes the rakyat to pay more for cars.

But Proton is still a national project with a local vendor ecosystem, which means its control needs to remain in Malaysian hands.

And since Khazanah is not in the business of running a car company, it must hand it over to a capable Malaysian car company or a company whose core business involves manufacturing or assembling and selling cars.

So, in comes DRB-Hicom and out goes Khazanah, in spite of the fact that some argue that DRB-Hicom would overstretch its finances if it does go through with the deal.

In any case, the deal or any deal that puts Proton largely, if not exclusively, in private hands is long over due. It should have happened way back when Proton's existence began causing huge distortions to the Malaysian car market.

But instead of quickly letting go of Proton with a view to making it the catalyst for huge foreign direct investments in the automotive sector, Proton was protected even more. As a result, the car market was distorted so badly that, at one point in the early 1990s, you could sell a first generation Proton Saga for the same price you had bought it when it first came out in the the early 1980s, if not more.

I remember CNN making a special report back then about Malaysia being the only place in the world where second hand cars appreciated in value. A reason for taking pride in the national car project? No. Absolutely not.

The actual causes as to why Proton became the market distorting, highly uncompetitive giant has been debated to the point of nausea. So, instead of focusing on that, let's focus on when the punitive taxes on imported cars would be removed (whatever form these taxes may take).

This is the 'elephant in the room' that no one is really talking about and, perhaps, for good reason. Removing Proton's special protection in Malaysia's car market remains a sensitive issue, such that no private investor would want to take control of Proton in the sorry state that it is in right now if market protection did not remain, at least in the short to medium term.

Still, the DRB-Hicom/Khazanah deal is as good as done. So, let's just get straight to 'elephant in the room'.

DRB-Hicom would be obligated to engage Proton's local vendors that form the local automotive ecosystem. But targets must be set.

Those that cannot or will not help Proton become competitive by a certain period must go, because it is simply a question of survival in an open market now. Lest, there would be consequence from Malaysia's neighbours in ASEAN who are pressing for the Malaysian car market to be opened up.

If Proton continues to be protected without any regard for free trade in the ASEAN region, our neighbours will retaliate. Proton's share prices will then take a nose-dive at the very least - the fact that Proton would also then become a hot issue for the Opposition goes almost without saying.

Well, let's hope Proton's saga would continue in a way that would make all Malaysians proud in earnest. The company must be allowed to go on its way without anymore hand-holding or molly-codling by the Government because, in the end, that is the only way to make it truly competitive both domestically and internationally, and the only way to make the national car project a real success.

There is really no point in holding on to a symbol of an era gone by if Proton cannot do its part in generating economic growth for Malaysia that would be comparable to the growth of leading emerging economies like China and India.

Kia has Arriaved - Flagship Optima Leading the Way

Kia, a brand that many people don't associate a lot of value with, is poised to overtake leading Japanese car makers Toyota and Honda in the Executive saloon section, thanks to its new Optima. Hailed as refreshingly good and stylish by reviewers across the world, the Optima is also about to make leading European car makers nervous, if not already.

At about RM144k++, how could a car that looks so good be so affordable? Well, that's just the start to Kia's formula to winning market share in the Executive saloon segment. The clincher is the Optima's distinctive styling.

Check out its sleek, subtly upward-swept lines and the smooth curves that complement those lines. Check out the distinctive front grill, headlights and bumper design. And check out its tastefully plush, yet sporty interior. The Optima can more than hold its own next to other Japanese and European cars in its class.

A car that looks this sleek and fast must handle great, too, yes? You betcha! If the Kia Forte 2.0SX with 18-inch rims can be described as sturdy and responsive, the Optima's handling can be described as sturdy, responsive and smooth - a real car person's car, this is.

And don't let its Executive class dimensions fool you. Its basic variant comes with 2.0L engine that churns out up to about 161Bhp and that's more than enough to zip along highways in style whilst outgunning tailgaters and road hoggers.

So, if you're looking to upgrade to an upmarket saloon, don't confine your choices to those of the usual Japanese and European marques, because Kia now has a real contender - the new Kia Optima.

More than that, I dare say, if I had to choose between a comparable upmarket German car and the Kia Optima, I'd go for the Optima, not because I can't afford a BMW, Merc or VW, but because the styling and quality gap for the Optima is so close to the BMW, Merc or VW, I'd rather put the savings I make from buying an exceedingly stylish yet far more affordable car like the Optima into a house or unit trust.

This is the same rationale I used when my wife was deciding between the Mazda 6 and the Mercedes C200 Kompressor. She decided to go with the far more affordable but also exceedingly stylish Mazda 6.

Till today, she does not regret her decision.

Quite honestly, even after test-driving the new, plush and sporty Volvo S60 T6, I did not feel like the new Kia Optima is such a big step-down that it would be unworthy of someone who can afford a Volvo S60 T6 (more on this Volvo beauty later).

And if a lot more consumers start thinking this way, European car makers, especially German car makers, would have a real reason to worry.

Mazda showed the way with the Mazda 6, followed quickly by Hundai's Sonata and, now, we have the Kia Optima, too.

When A Car is Art - Peugeot 508

This morning, while driving to work on the MAX highway, I came across a brand new Peugeot 508. I was expecting to be impressed but, instead, I found myself cringing and, after a while, I couldn't help but snort and smirk.

It doesn't look like a typical Peugeot "lion", but it's not as refreshing as I had expected.

Dang, what's with Peugeot these days? It keeps churning out one difficult-to-like car design after another.

The Peugeot 508 is no Van Gogh, but I can tell, it's trying to be. It does follow contemporary design trends, which these days tend to be all about flowing lines and curves that depict motion - this is why great looking cars appear fast even when they are standing still. At the same time, the Peugeot 508 is, well, different, like how a Van Gogh is different from its contemporaries, but for the 508, "different" doesn't appear to have worked out as well as it has for a Van Gogh.

The 508 has many contemporary features like LED lights, swept lines and curves, but they appear as though they've been slapped together by a bored, uninspired artist - or an artist whose work has been interfered with by overbearing bosses. The rear looks like a reshaped BMW 5 series, whereas the front looks like an old Honda Accord. And the side profile is rather plain.

Or maybe, the Peugeot 508 is different in a good way, such that it takes time for people to gravitate to its design, in which case, only time will tell.

BMW Chief Designer Chris Bangle said that "Great cars are art" (see http://www.youtube.com/watch?v=teV6Oa6mVPE). Of course, there are the cutting-edge, technical aspects of all great cars, but more than that, they are works of art. That is why people buy them, or aspire to.

We also buy cars out of the sheer necessity of getting from point A to point B, but if we simply buy a car that has little aesthetic value to it or, to put it simply, is weird and ugly, we're going to want to buy something better looking sooner rather than later.

So, let's see if the Peugeot 508 becomes likable by a lot of people. If it becomes more of a common sight on the road, then Peugeot may be on to something in terms of car art.

Still on Rims Thingy - I've Done Sleek, Now I Can Live with Cute

Each time I buy a new car, the rims and tyres almost always disappointment me. That's because they tend to be a tad too small for the wheel wells, leaving a disproportionate gap between the tyre and wheel well - check out the Madza 2's rims and tyres for instance.

Of course, I try not to upgrade to larger rims. At the most, I'd put in bigger tyres, at least in the beginning. After a year, I start getting the upgrade-to-bigger-rims itch.

Funny thing is, I don't think there's really anything wrong with just settling for smaller, cute looking rims and tyres.

But the itch just settles in and I just have to upgrade.

Fortunately, now that I've done that with my Kia Forte, I can live with cute. And I like cute. In fact, I can even live with donut-looking tyres, because I've done sleek by getting low profile tyres and larger rims with my Forte.

:P

Don't Trade-in Your Old Rims - Sell Them via Mudah.my

Many car enthusiasts make the mistake of trading in old rims when upgrading to new ones. Most of the time, we get much less than what we feel our old rims are worth.

Sometimes, the offer we get is so low, it's actually insulting.

For instance, the trade-in offer that I got from Eneos for my Kia Forte 17-inch rims was a measly RM500.

Supposedly, there was not much value to the Kia Forte 17-inch rims. My old Nexen ZR tyres fetched a higher value of RM400, which meant that my rims were valued at only RM100 by Eneos.

This is, of course, ridiculous. Yes, my rims are used rims, but they are in good condition - no curb marks/scratches or dents and they've never been reconditioned. With a little buffing, you'd have difficulty telling the difference between newly fitted Kia Forte rims and my old rims.

So, instead of trading them in at Eneos, what I did was advertise my old rims at Mudah.my. RM800 for 4 of them.

Within an hour of my advertisement going up, I received an email from a prospective buyer who expressed interest in buying my old rims.

Fancy that! From RM100 to RM800. That's 800% more than what Eneos was offering.

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Addendum: The rims are sold, thanks to Mudah.my. Goes to show, you don't have to be reliant on second hand cars/parts dealers to get your money's worth.