Archive for Thoughts

The hot topic for last week was the new National Automotive Policy Review, a so-called ‘facelift’ for the National Automotive Policy that was first born on the 22nd of March 2006.

The NAP review is a disappointing one, with the prices of cars to be pretty much the status quo for a long time to come. In fact, the prices of hybrid cars are sure to go up once the 50% excise duty rebate ends. But there are parts of the NAP that have significant negative impact on us as motorists, one of which is the announcement that the import of used parts will be prohibited from June 2011 onwards.

Car companies and parts manufacturers do not survive on just selling you your car, which is a sum of parts from various OEMs. They also earn a significant portion from the sale of replacement parts, which you will inevitably need as parts are not designed to last forever. Not sure if the word greedy is justifiable but sometimes these new parts can be priced quite exhorbitantly. Which means used parts are very popular and are pretty much key to the sustainability and/or viability of keeping an old car running.

Banning the imports of used parts and the halfcuts which contain them would mean if your City’s CVT transmission dies, you are unable to source a good condition used one from a Honda Fit Aria halfcut that had been scrapped in Japan due to the country’s scrap policies. It means that when my Proton Perdana transmission finally dies and is beyond a refurbishment, a used one sourced from a Mitsubishi Eterna will not be an option – I will have to buy a 2nd hand Proton one or a NEW one, which I probably will not be able to afford as I am not the Perak or Terengganu Mentri Besar(s).

Of course, these situations will not happen right after June 2011 as there is bound to be existing stock in the country, but that will run out sooner or later. And then what? We cannibalise each other’s cars for used parts, whether willingly (scrap) or not (theft)?

And then there is the total disregard for the livelihoods of the chop shop businesses which have been run for decades and suddenly have their main source of income taken away from them. I visited a few chop shops and interviewed their owners over the weekend, curious to see how they were reacting to this piece of bad news.

One chop shop did not even know that such an announcement had been made. Danny of Soon Loi Sdn Bhd in Batu 11 1/2 Cheras said that he had been unaware that the government was planning such a thing and he and his wife was clearly in shock. I felt really bad watching their reaction. At first they were talking normally and keeping their cool but after awhile you could see they were quite emotional about it.

Their chop shop is a family business and has been running since the 70s. Danny is now the 2nd generation, taking over from his parents. He said chop shops have been around since before he was born and did not understand why the government suddenly wanted to stop the import of used parts.

The government’s justifications for this move are ’safety and environmental’ concerns. From my view I see it more as yet another way to discourage us from using our old and hardy classics, instead driving us to buy new budget cars instead of that RM20k Toyota Corolla AE101 which alot of people are much more comfortable driving as a daily driver than a new car. The common sentiment is that old cars tend to last longer and have better plastics than new cars today and in many cases I find that to be true.

According to Danny, the parts in his stock consist of over 80% overseas imports and only about 20% local parts. I asked him what was he going to do when the new rule is implemented. He said he could not do anything but to look for local cars to ‘cut’ instead of getting halfcuts from overseas.

From a consumer perspective this means certain ‘upgrades’ such as fitting a Cortina 4-speed with a 5-speed manual from a Ford Sierra would be impossible as the Sierra was never really sold here. From the chop shop owner’s perspective, business will be A LOT tougher than usual. To quote his wife’s exact words, “Mati loh!”

I tried looking for a more premium chop shop and found Happy Auto Parts in Sungai Besi which specialises in continental parts. This is near the Auto Bavaria Sungai Besi showroom. There were plenty of BMW E34 front clips there, and there was even an E39 pre-facelift front clip. The owner CM Tan also operates a workshop in the same premise so at least he has something to fall back on when his chop shop business runs dry. Being a specialist BMW used parts center, 100% of his inventory are from overseas.

CM Tan says that the business of a chop shop is not easy to do. You have to build your relationship with your overseas suppliers over a long time – this can be years and years. According to Tan, sometimes even when you find some good cars to be clipped, it doesn’t mean the overseas supplier will sell them to you. There are so many chop shops from so many countries fighting for these cars.

You also need to have a trained sharp eye to judge what cars are suitable to be clipped and he claims that with the 1 week warranty that most used parts have, the return rate for a lemon clip can be so high that you can potentially even lose money on it, or just break even.

He likened the government’s new rule to telling medical students that have given their life to training to be a doctor for many many years that they suddenly are banned from practicing medicine. He has been in this business all his life, what else can he do?

It’s really quite unfair, when you consider that in another segment of the industry, Open AP holders have gotten hints of the system being scrapped for many years now. Only when this NAP review was released have the government somewhat put their foot down and said the system will be terminated by 31st December 2015.

That’s over 5 years of lead time for them on top of the many ‘hints’ that they’ve been getting for quite sometime now, and the RM10k per AP to be charged from 2010 onwards was to go to a special Entrepreneurship Fund that will help these ex-Open AP holders diversify into other businesses.

So much lead time for these Open AP holders to move on to other things, and so much help for them to start new businesses (on top of the money they’ve been earning from the APs so far), but on the other side of the spectrum, used parts dealers only get less than 2 years! I asked both CM Tan and Danny what they would be doing now that they’ve learned about the news – would they bring in more inventory so that stocks would last longer while they figure out what to do with their lives?

They feel it is hard for them to make a decision like that as the government and/or relevant ministry has not released any hard details on how and when exactly this used parts import ban would take place.

It remains a small paragraph in a long document for now, but one that will cause them sleepless nights until the picture is made clearer for them.

Now that most of the regional automotive manufacturing and assembly has gone to Thailand, the biggest buzzword that had been uttered repeatedly during the period where the NAP review was being formulated was hybrid cars and green technology.

So we had to shift focus. The government was quite bent on trying to get a piece of the green pie instead. Or so it seemed, there was plenty of talk in the papers. And you know what they say, supposedly in ASEAN you build your pick-ups in Thailand, your MPVs and vans in Indonesia and your passenger cars in Malaysia. That’s supposedly what kept Volkswagen interested despite flip-flop partnership decisions in the first place.

The new National Automotive Policy review offers a cocktail of R&D grants, duty exemptions, fiscal incentives to whoever invests in the assembly or manufacturing of hybrid and electric vehicles. For automakers, you’ll get 100% Pioneer Status/Investment Tax Allowance for 10 years, training and R&D grants in addition to existing grants, 50% exemption on excise duty on CKD/manufactured vehicles from the IAF.

For hybrid parts suppliers such as electric motors, batteries, Battery Management System, inverters, electric-powered air conditioning, and air compressors, you will get 100% Pioneer Status for 10 years and 100% Investment Tax Allowance for 5 years.

Even before the NAP review was announced, there was one measure that was announced leading up to these new hybrid/EV car incentives announced during the Budget 2009 last year. Imports of CBU hybrid vehicles were given an exemption on import duty and a 50% excise duty exemption. These exemptions will end on the 31st of December 2010 and the NAP review mentions no intention to extend this deadline. If you want to grab a Prius or a Civic Hybrid, you’d better do so before the end of next year, as prices on these cars are sure to go up.

The biggest blow to the government’s green dreams was the announcement that Toyota was going to setup a hybrid manufacturing facility in Thailand. One of the cars that were to be assembled is the Toyota Camry Hybrid. Toyota sells the most hybrid vehicles among all automakers and they are probably the first to setup a hybrid plant outside of their ‘home ground’. Because of their best-seller status, they are able to get the volumes to justify new investments not only in Thailand, but in Australia and soon the UK.

Even with the new lower price of RM129,980 (RM1,180 higher than the Civic 2.0S), Honda Malaysia Sdn Bhd only managed to register a total of 100 units of the new Honda Civic Hybrid in Malaysia as of July 2009, and this is the total amount registered since its introduction in our market. The numbers for the much more expensive Toyota Prius certainly will not do any better.

It looks like hybrid cars remain a niche product here despite reduced pricing and there is simply no volume for any car manufacturer to even think of setting up Malaysian assembly facilities, let alone manufacturing facilities. Unless of course you are talking about the ‘SKD’ trickery that some car companies are successfully pulling off. All Honda hybrids are so far assembled at its Suzuka plant.

The government has failed to understand that the production of hybrid vehicles cannot be simply placed anywhere a car company likes – there has to be an ecosystem of hybrid component suppliers as well. It’s a completely different chicken and egg scenario than the one the government thought was most important – pricing and acceptance of hybrid cars which they attempted to solve with the CBU hybrid car incentives that managed to bring the prices of the Civic Hybrid and the Prius down in Malaysia.

And now that Toyota – the largest seller of hybrid vehicles in the world – has placed a hybrid production center in Thailand, guess where the hybrid supplier eco-system is going to be?

The only thing we can do now is sit and wait for hybrid vehicles to take off in terms of acceptance and sales internationally. Then maybe some will come here. But that’s a big maybe. We can look at companies like Ford and GM. GM has a big base in Thailand but they’ve shown some interest in facilities here in the past. We’ve already covered how the Chevrolet Volt is simply too expensive a vehicle to make for what it is, but perhaps the next generation of GM hybrids.

Ford has also shown some improvement in its hybrid car sales – it’s hot on Honda’s heels to take the position of the #2 hybrid seller in the US from the Japanese company. But still, all of these hybrid cars from non-Japanese manufacturers are very US-centric – all medium to large SUVs pretending to be green by adding a motor-assist system in order to comply with weird CAFE systems. They won’t sell in any kind of decent numbers here, not in Malaysia, not in this region, so no reason to assemble them here. Ford Europe is relying more on diesel but the Ford Kuga will be the first European hybrid for the company.

But seriously, for any of that to happen, there will be a gap of years and years in between the end of the CBU import incentives and the introduction of the first locally assembled/produced hybrid car. Prices will shoot up skywards all over again. Hybrid cars will once again become unaffordable. When the cars are not on the road, people will be less exposed to them. Whatever low level of acceptance that hybrid cars currently have will once again go down the drain. And then the first CKD hybrid car will roll out with a decent price, with everyone being afraid to actually buy it.

Do you see what’s wrong with the picture?

While reading the NST sometime last week, I spotted this column by Rehman Rashid, on the breakdown of the Proton and Volkswagen talks. It was a very pro-Proton column, but there was this one paragraph…

And then there’s India, home of Mahindra, Maruti, Bajaj and the Ambassador – and a 300 million-strong middle class with fewer than 15 cars per 1,000 people and 10,000km of new toll roads being built. It’s easy to imagine rebadged Perdanas, Gen.2s and Personas in New Delhi, Chennai and Mumbai. Volkswagen or GM can’t build a car for under RM20,000 to match any of them.

Sadly, neither can Proton… not in it’s current state and not for a long time. And neither can many Indian manufacturers! While it’s true that Volkswagen and GM are having troubles building a cheap car at those kind of prices (perhaps why Volkswagen was interested in any kind of tie-up with us at all to begin with, some say Volkswagen wanted the upcoming New Proton Saga to be its new cheapest car positioned under the Volkswagen Fox), I don’t think the Perdana, the GEN2 and the Persona can be produced and sold in India for under RM20,000 either. One only needs to look at the prices of those cars in our local market to know.

So let’s jump back to reality abit shall we? Everyone who cares about the automotive industry, or has a responsibility to say something about the national concern of the week has commented on the Proton-Volkswagen talks, and all of them – including the big man Syed Zainal himself – have been saying China and India are integral parts of Proton’s turn-around plans.

Proton has already made some in-roads in the Chinese market – a rebadging deal with Jinhua Youngman. An interview with Syed Zainal in StarBiz reveals how that deal came about – Jinhua Youngman (a Chinese coach and truck maker) originally went to Lotus and asked them to design a car for them. It was suggested that Jinhua do a badge engineering deal with Proton instead, since the cars were already there. It seems Jinhua Youngman has already managed 1,500 bookings before the car is launched.

But India is a market in which Proton does not have a presence in yet. Is India a perfect match for Proton and the models it has? Rather than just imagine… let’s take an analytical look at the situation in the Indian market.

INDIA: Current Industry Sales Figures and Growth Potential

India has only 12 motor vehicles per 1000 persons, whereas China has 10 and Malaysia has a staggering 641! That makes us the 3rd most saturated country in the world behind the United States (765) and Luxembourg (686). In comparison, Japan has 543 and the United Kingdom has 426. [1]

Admittedly, the term “motor vehicles” also include two wheelers and not just passenger cars, but this is also the case for India. For Financial Year 06-07, 77% of India’s total industry volume comprised of two-wheelers. The remaining comprised of 1,076,408 passenger cars (14%), 220,199 utility vehicles and 83,091 MPVs. This is a huge amount of vehicles, and the 14% figure only stands to grow as many Indians slowly graduate from two wheelers to cars.

The potential is huge considering as India’s GDP goes up, the market for motor vehicles will increase tremendously. According to Global Economics Paper No. 99 by Goldman Sachs [4], China’s GDP would be exceeded Germany by this year, and Japan by 2015 while India would do the same by 2020 and 2030 respectively. Emerging markets that are considered “old news” in the automotive industry include Brazil, Russia and China. These markets are expected to decline in growth from 2015 onwards, while India is expected to continue showing stable growth. [Source]

INDIA: Penetration Potential and Government Policies

The Indian automotive industry is seen to be “friendlier” as compared to the China. According to a Japanese analyst source, many Japanese vendors are now looking for an “India Plan”. More and more are turning away from China because of cases like the much publicized GM vs SAIC legal case over the Chery QQ, allegedly a clone of the Chevrolet Spark.

The Indian government also has initiatives like the National Highways Development Project (NHDP), and has committed RM 274 billion to the NHDP under the 11th Five-Year Plan. Malaysian companies like UEM and IJM are already in India, working on these highways, roads and flyovers. A clear sign that India is serious about improving its country’s transportation.

Of course, the highways are no use without motor vehicles, and for that India has a clear “Automotive Mission Plan” that covers the years 2006 to 2016. This plan was prepared by the Ministry of Heavy Industries and Public Enterprises of the Government of India and outlines automotive industry investments of up to US$40 billion (RM 135 bilion) over the 10 years. The plan also focuses on exprts, with a 25-point plan. While obviously requiring more consistency and notice period before changes are made (manufacturers are asking for a minimum of 2 years before and major alterations are made), the plan gives investors a lot of confidence. There will not likely be any sudden random changes in policies, something that are unfortunately getting familiar with.

From a Malaysian perspective, the legal system could possibly be easier to understand as Malaysia and India were both former British colonies and are still Commonwealth members. Communication would also be easier, in English if the Malaysian/Indian accents dont distort discussions and negotiations. Lastly, as is Japan, Australia and New Zealand, India is a right-hand-drive country whereas China is LHD. This means less re-engineering cost for the new market.

INDIA: The Big Players

Sales Matrix – Indian Passenger Cars for August 2007

Source: Autocar India, October 2007

Above are the sales charts for the Indian passenger car market in August 2007 alone. As you can see, Maruti Suzuki India dominates the Indian market with their Suzuki-badged cars, and the Maruti-Suzuki M800 is just about the only car that is priced under RM20,000 (Rs 2.16 lakh is about RM18,500). Yet it is not the top selling model, which shows that the Indian market is maturing – the 1983 Suzuki M800 is OLD and no one wants to be stuck with a stone age car. They want something fairly modern, and stylish even, but being economical in terms of both fuel consumption and initial purchase cost plays a huge factor.

What Is The Ideal Indian Car?

Like I said, fuel economy and initial purchase cost are huge factors for the current Indian car buyer. Petrol in India costs 49.49 rupees (RM4.07) per liter, and diesel costs 32.45 rupees (RM2.78) per liter. As evident from the top 10 sales list, except for number 9 and 10 which is an MPV and a 4X4 respectively, India needs small cars. It would also be ideal if the car had a diesel powertrain, especially if you want to introduce a larger sedan-bodied model. A diesel variant is a must have if Proton were to enter the Indian market, and from what I hear there are certain Proton prototypes with third party-sourced turbodiesel units already. Manual transmission is a must as Indian motorists seem to want to save every single drop of fuel they can.

The Best Way To Enter India

The obvious way is to tie-up with a company that already has a nationwide sales and service network in India, and a gap in the company’s product line-up which allows Proton models to be slotted in. This will provide Proton a quick entry into India.

Maruti Suzuki is out as they have their own brand to run. Tata may be a good choice, but their mainstay is commercial vehicles, although their Tata 1-lakh car and 2008 Indicar/Indigo plans are interesting, as is their relationship with Fiat. Backtracking to the bit about car prices, 1-lakh rupees is about RM8,563.00, but now it seems the car might end up being 1.25 lakh instead (RM10,700). Both Hyundai and Suzuki are also working on similiar projects. Anyway, Tata has 11 variants of the Tata Indica alone, not including the Indigo, so there is definitely no room for Proton in the Tata stable.

Mahindra looks to be a perfect choice. Yes, they have a relationship with Renault to sell the Renault Logan in India, but many who’ve seen the vehicle says it feels too cheap and is put together too cheaply – this is not really in tune with maturing Indian customer tastes. The Logan’s launch in India also did not go as well as expected – not enough ready stock at launch, too high of a booking deposit, slow production, expensive diesel option, and limited variants. [Source]

Business Times reported back in April 2006 that Proton was in talks with Mahindra. In more recent news, Syed Zainal reveals in the StarBiz centerspread interview that Proton is now talking with a company that is currently in the tractors and 4X4 segment but wants to get into passenger cars. I strongly believe this could be Mahindra. Syed Zainal says the deal will be similiar to the Jinhua/Europestar deal – this could mean rebadging instead of the Proton brand being introduced there.

Where Will The Cars Come From?

CKD assembly in India is the best way to go about it because of tax/duty concerns, and the Indian partner would have a manufacturing, logistics, vendor network and system already in place. A combination of various duties – Excise, Customs, and VAT – could hike up the price of a CBU car imported into India by 60% to 100%, but for CKD pack imports it is generally about 10% only. [Source] But it’s worthwhile to note that India is currently on observer status in ASEAN [Source] – there could be a possibility of India moving to establish Free Trade Agreements with key ASEAN countries in the next few years – it already has an FTA with Thailand.

India has had an installed manufacturing capacity of 1.75 million cars annually since the year 2005, but the Total Industry Volume has not reached that amount yet, so there is plenty of capacity to locally assemble Proton cars there.

The Perfect Proton for India

Syed Zainal mentions in the StarBiz interview that Proton will be offering the BLM, the GEN.2 and the Savvy to the Indian partner. He says with the right product offerings, a car company in the Indian market could snag an estimated combined sales volume of about 200,000 units a year for 2 to 3 cars, which should be possible if one of cars gets onto the top 10 list (refer August 2007 sales table above).

India divides passenger cars into different segments, from A1 to A6. There are four Lower A2 segment cars on the top 10 list – the Suzuki Zen Estilo, the Suzuki Alto, the Suzuki Wagon R and the Hyundai Santro. India defines a Lower A2 segment car as a car between 3490mm and 3650mm in length. Then there is the Upper A2 segment which measures between 3650mm to 4000mm long – represented on the top 10 list by the Tata Indica and the Suzuki Swift. Longer than the Upper A2 segment is the Lower A3 segment, which measures between 4000mm to 4200mm and includes cars like the Ford Ikon and the Tata Indigo, but none of them are on the top 10 best seller list.

By just looking at the types of cars that are on the list, you know you need an excellent Lower A2 or Upper A2 segment contender. Proton has two cars that could fit into what India considers an A2 segment car – the Proton Savvy (3710mm) and the upcoming Proton BLM, which could fall in either the Upper A2 or Lower A3 segments.

If the BLM follows the Persona’s foot steps, it will end up being a rather decent car. I believe if the kinks are ironed out of the Campro’s strange torque curve (through the variable intake module perhaps?), the BLM and a Campro-equipped Savvy could be better cars than cars like the Hyundai Santro (we know this car as the Atos here in Malaysia). Proton has cars with modern styling and up to date interiors. What we don’t have right now is a diesel – one of the lasts bit of the ideal recipe.

Small hatchbacks in India are preferred and retain value better compared to three-box sedan cars. One reason could be because sedans in India are more expensive compared to hatchbacks on initial cost – the opposite of what’s happening in Malaysia and around the world where hatchbacks are seen as a sporty lifestyle choice and command a higher price – just look at the Honda City vs the Honda Jazz here in Malaysia. The other factor is the fact that a smaller hatchback is simply preferred in the very busy streets of Indian towns. A hatch simply takes up less street real estate and parking space.

But this doesn’t mean a small sedan will not work in India. For a case study, we can have a look at the Suzuki Esteem 1.3L, which is about 4095mm x 1575mm x 1395mm in dimension. According to the little guesswork I did which I demonstrated below, the Proton BLM should be nearly equal to the Suzuki Esteem in length – an estimated 3975mm to 4050mm length – (to make up for the angle in the photo) so it could either be an Upper A2 car or a Lower A3 car.

You can try doing your own guess-timation calculation on how long the BLM is – the pixel values above will not tally if you measure the image because I did it with a larger image then resized it down to fit this site. Plus the image is actually taken at an angle so it would not be accurate. I assumed the BLM would use the Savvy’s platform and not an extended one, so the same wheelbase would apply.

It could be that the Suzuki Esteem is not doing that well in India because it appears to be an old workhorse, and is not so palatable compared to the newer Wagon R, Zen Estilo and other “newer” models. The BLM will offer a “fresher” Lower A3 sedan choice.

So to answer the question – what is the perfect Proton for India? In this case, the answer would be the Savvy and the BLM, and priority should be to get the cars locally assembled in India as fast as possible.

But the danger with this could be having the Proton or Proton-badged marque be associated with cheap cars forever – a problem that Maruti Suzuki is facing right now. Competitors like Honda and Toyota took a different approach – enter with the more expensive models to build the brand, then move downmarket with cheaper offerings.

Price point is also something to ponder about – assuming the BLM is RM32,000 here in Malaysia, that would translate to about 3.7 lakh rupees. Seems pricey considering most of the models on the top 10 list start from under 3.0 lakh rupees. But then again as I’ve mentioned before it is normal for sedans to have a premium over hatches in India.

Last but not least, with the possibility of India-ASEAN FTA’s being put into place in the not-too-distant future, it would be very good if Proton develops vendors for specific items in India, to cater to regional or global (if I could be so bold as to use that word) Proton production. It would meet the spirit of the CEPT where countries agree to lower import duties while exchanging a roughly equal value volume of components. An added bonus, to take a page from what the Japanese manufacturers like Toyota and Honda are doing, is to use these ‘roots’ in each country to show evidence to the government that the manufacturer is not just there to make a quick buck but has developed local vendors and is serious in creating export opportunities for the host country and/or state.

A wishlist for India-bound Protons: models must have retractable electric wing mirrors because of the danger of two wheelers accidentally clipping the wing mirrors off. The wing mirror mount should also allow for the mirror to detach easily when forced to break without damaging the car body. Ideally the car body could employ a similiar material to the Nissan X-Trail’s fenders which are dent-proof when it comes to little bumps and knocks. This material could be used in key body parts like fenders, like on the X-Trail. Again, something to cope with the huge amount of two-wheelers there. That way Proton (or Mahindra perhaps, if a rebadging deal is done) can claim the new car is designed for Indian roads.

And of course most importantly, a diesel engine.

SOURCES:
[1]: http://www.nationmaster.com/graph/tra_mot_veh-transportation-motor-vehicles
[2]: http://www.cybersteering.com
[3]: http://www.siamindia.com/scripts/custom-duty.aspx
[4]: http://www2.goldmansachs.com/insight/research/reports/report6.html
[5] http://www.indiaenews.com/business/20060706/13939.htm / Wikipedia: NHDP
[6]: http://news.bbc.co.uk/2/hi/business/5049398.stm

Some of you may have noticed there has been some kind of shift in the prices of import marques in Malaysia, and also the way they are brought in – whether CKD or CBU. We now have CBU Japan imports at never before seen prices: the Mitsubishi Lancer GT and the Suzuki Vitara comes to mind.

Something that’s quite the opposite has been happening with the Korean makes here in Malaysia. Kia cars in Malaysia have classically been CBU models with only the Kia Spectra being a CKD model. Let’s not count the Naza-badged CKD models. Recently for the first time in a very long time, two new Kia models never seen before in the Malaysian market have been launched as a locally assembled CKD models.

Things are definitely changing somewhere in the tax department when it comes to cars. Excise exemptions? Free trade agreements? Industrial adjustment fund? These are the few possibilities that could be the catalysts for these changes with how import marques are sold here in Malaysia.

Back in July 2007, we also saw MITI take a step which many saw as a step backwards in the Malaysian automotive industry – allowing Open AP holders to import any car they want. Previously, Open AP holders could import any cars they wanted except for models that have been assigned to the franchise AP holders. Now you can see grey importers like Naza World bringing in the Honda Stream.

How has this affected Honda Malaysia’s own marketing plans in Malaysia in regards to the Honda Stream? I am sure they have planned to introduce it sooner or later. Honda Malaysia has invested so much here in Malaysia – an assembly plant in Malacca which even does some good for the economy by bringing in some money into the country by exporting CV joints.

To see it in a positive light, perhaps it is good that this grey import Stream has been given such a ridiculously high price tag – it could increase market perception of the Stream’s value and if Honda Malaysia gets around to introducing it with a lower price tag, it could have a positive effect.

Despite used car imports now being limited to 3% of the total market volume, grey importers can definitely damage the hard work that principals have been putting into their product plans. I cannot figure out these strange policies set by MITI which seemingly punish foreign investors who have poured money into our automotive industry. We are already losing out on so much to our neighbours.

Related Posts:
MITI now allows Open AP holders to import any car
2007 Honda Stream CBU imported by Naza World

Here is a letter sent in by Kumaresan Balakrishnan, a student from Johor Bahru currently studying in the UK. He shares with us a little about Proton cars in the UK.

I am a student originally from Johor Bahru, now at the Hull University Business School, doing Marketing and Logistics.

I have pictures of UK police Waja fleet. The Humberside Police in Yorkshire have a fleet 90% comprising of Wiras, and Wajas, and their plainclothes police drive GEN2’s.

Protons are extremely popular in Hull. I see many of them while walking to University from my house. Also, 50% of the taxis in Hull are Protons. Hull is the 7th largest city in England.

I have spoken to Proton owners here and they have nothing but praise for the vehicle, which I found unbelievable judging by the amount of problems my mum’s Waja has been giving her.

While taking a picture of the front of a police Waja, I was caught by the policeman who was using the vehicle. He had just returned from buying a sandwich at Subway.

After explaining to him why I was doing it he kindly allowed me to open the door and take a picture of the dashboard, but he was a bit shy and declined to let me take a picture of the car with him in it.

Everybody I ask seems to love their Protons here. Very, very, very strange for a person like me to hear such comments. I wonder if the quality control of export-bound Protons really are that much better.

More photos after the jump.

Click here to read the rest of Letter: Proton in the UK

I’ve been wondering about one thing for quite sometime now. Why isn’t Mercedes Benz putting the M266 into more of it’s cars? Where does the engine come from? Is it a Mercedes Benz development used solely in vehicles like the A-class and B-class or is it shared with other cars like Chryslers? As far as I know, Chrysler inline-4 engines use the GEMA engine (4B11) found in Mitsubishi, Hyundai and Chrysler cars.

The M266 comes in a few displacements, but one of the most notable ones is the M266 Turbo (M266.980), found in the Mercedes Benz B200 Turbo. Unlike Mercedes Benz’s other inline-4, the M271 Kompressor which uses a supercharger, the M266 Turbo uses a turbocharger. It is mounted transversely and is mated to either a 6-speed manual or an AUTOTRONIC CVT gearbox, sending power to the front wheels. It uses a BorgWarner K03 turbocharger. The M271 is a longitudinal rear wheel drive design.

Here is a comparison table between the M266 and the M271. The M271 specs used in this comparison is of the W204 C200K specifications. The M271 comes in different specs like different boost levels, which result in different performance statistics. Note that the W204 C200K’s M271 is not the most powerful M271 around, with factory tuning of course – the W203’s C230K has a slightly higher power output (192hp).

Based on the comparison table above, which engine looks like the better performer to you? I’m not sure why Mercedes Benz has two inline-4 engines. It should just pick one and stick to it, economies of scale are better that way.

Maybe the M266 could be adapted to rear wheel drive, or the M271 could be adapted to front wheel drive, though I think the former is easier, plus the M266 is a newer engine anyway and its performance looks better to me. However some might be turned off by the 8-valve SOHC valvetrain design, but then again what does that matter when the performance results are there? Power peaks earlier in the rev range, and torque has a wider spread and kicks in lower and stronger.

DaimlerChrysler is currently using three different inline-4 engines in it’s cars, the GEMA 4B11 engine, the M266 and M271. There is no place in the world’s automotive industry for inefficiency. Everyone is sharing components – a recent example would be BMW and Peugeot sharing a common engine with different configurations for the MINI Cooper and a few Peugeot models.

These are just my thoughts – if anyone knows these two engines in further technical depth and know why both need to exist, please do share in the comments for the benefit of all motorheads!

Having been tagged by the country’s number one cyber-patriot, the ever-entertaining but often-misunderstood Daft Oi to post up entry No.24 in Nizam Bashir’s 50 Posts to Independence project, I have decided to allow Shannon Teoh, a journalist from NST and part-time contributor to this site, to tell his rather interesting tale of two cars. Coincidentally, his first two cars were the same as mine. Full story after the jump!

Click here to read the rest of 50 Posts to Independence No.24

First of all, thanks to Mat Kamil Awang for the pointer to these documents. The source for the data I am going to use in this article is from a Japanese site hosting presentations from the 4th Asian Petroleum Technology Symposium. This particular presentation is entitled “Clean Fuels for A Clean Malaysian Environment”, by Harlina Firdaus Marzuki and Fazil Mat Isa of PETRONAS Research & Scientific Services.

This is heavy reading but insightful, so bewarned! Continued after the jump…

Click here to read the rest of Analyzing fuel quality in Malaysia – 3 out of 6 already Euro II compliant for petrol!

Happy Chinese New Year of the Boar to everyone. Hope you had a good time. Me? For personal reasons, there’s not much celebrations going on except for the exchanging of ang pows, plus my internet chose to be down the entire festive season. The last time my internet died was during Hari Raya. I see a pattern here.

Every Chinese New Year, I am unable to rest without fidgeting around and worrying about my cars. You see, I happen to live in a neighbourhood where most of my neighbours are young parents with little kids. They play lots of firecrackers. While I am not against this, there has been an occasion in the past where fire crackers hit my Nissan Sunny. No compensation was given, and when advised to go play their fire crackers in a playground just down the road, the advice was ignored. Now I am constantly reparking my Proton Perdana and a press car BMW 130i M Sport, especially the latter, further down the road and inside my house whenever I hear firecrackers.

Has any of you had this problem? Has fireworks and firecrackers damaged your car? Do you have the same fears that I do, or am I just weird? I think my paranoia is justified, as it HAS happened before. What do you do with these kind of neighbours?

With the recent floods in Johor, you can safely say that many people are picking up the pieces and putting their lives back on track. Buying a new car might be the last thing on the minds of Johoreans who probably need to refurbish their homes, buy new clothes, furniture and other necessities.

More after the jump…

Click here to read the rest of Johor Motor Sales