The automotive industry is facing a few problems. High component prices such as steel and insane fuel prices. The Economist has a very good article on the state of the automotive industry as whole, as well as predictions on where things are going.
Automobile manufacturers must be leaner and fitter
Mergers do not work well, expected to be a thing of the past
The French-Japanese deal that profited (Renault Nissan)
The German-American deal that flopped (Daimler Chrysler)
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Paul Tan
After dabbling for years in the IT industry, Paul Tan initially began this site as a general blog covering various topics of personal interest. With an increasing number of readers paying rapt attention to the motoring stories, one thing led to another and the rest, as they say, is history.
i dun understand.. the merging of big companies.. the rising of china's car manufacturers.. what the hell? eh? potong dealing with nissan? reanult i know, renault + proton = savvy (1st lotus..)…. what happened with vw? they didnt buy potong's stocks? now dealing with nissan? eh paul.. explain.. i dun know what's going on….
no la that are example of good decision made by automotive company. the problem tht being mention there are world problem not malaysian only. er am i right?
ssshheeeeeesh ! Paul … very frightening … anybody reading the article will have second thoughts before going for his big Proton interview. Like the great Mohd. Ali once said, " We got experts working on that ". … I am going to wait and hope that it does not rain in Spa.
ya, so the theme is,the more brands u have under ur belt,the more u can penetrate world market,and cheaper ur overall cost become…since only one platform can privode several model thats based on,as each brand can concentrate one one particular car segment,rather than one brand concentrating on all segments which is very costly nowadays….brands like bmw/toyota/honda already had worlwide markets few decades ago,thy didnt have to acquire to expand..bt companys like nissan/renault,daimler/benz,each had a diff market,renault mainly i europe,nissan in asia,chrysler mainly or almost all their biz is US dependant,thy wanted to enter othr markets using the benz brand….i tink if merger works,it really works,bt any litle screw up , no 2nd chance….its such a fine line…bt i believe the autoindustry is gradually evolving,bcos it has to cope with raising costs,n find othr ways to be cost effective…
1) Regulation: Each countries had its own laws. Emssion, Safety, Lamps, license plate size, glass or window lights transmission and colors.
2) LH and RH side: What the hell, even Europe and England still had variations, Why can't British change and follow the majority? Of course investment needed but long terms cheaper development cost. Just make It one standard, LH or RH only.
3) Models range: From lowest 660cc until not known (7000cc). Sporty to cheap, luxury to low class.
4) Trim level: from low grade to high grade seat interiors, all the TV, radio, DVD.
5) Accessories: Spots lights, spoilers, sunvisors until Tyres, and Rims.
6) Spare parts: Each models, no matters Old or Just debut, Keep stocking the parts. If less spare parts, Customers complaints too expensive but if kept more company losing money, cost JUST TO KEEP STOCKING! Every year, 10 to 20 models launched in a country, DEAD man.
7) Service center: Technical supports and maintenance cost. Less center bad services, MORE center if no problems Waste money!!
8) RECALL: When ever something new problems occurred, unexpected by Engineers, mis-installation by workers, RECALL……CALL AND CALL……All money burns.
9) Product design, Styling and Shape: Good styling or bad styling after few years before FADE. More models debuts means more comparison of shape. Just like a shop A selling only KARIBAU and TEH TARIK, customers only order it and never complaint it, but other shops B offer KARIBAU with Egg and TEH TARIK tarik sampai Langit than customers will complaint shop A. Different nation has different taste and opinions, like Indian, china, us, europe,…Asian. Best selling models in JAPAN doesn't means BEST SELLING in MALAYSIA like Tiara and Juara case.
10) Price: You Set too high, ppl said TOO expensive not value for money, Set too low ppl said it is cheap car, only low class ppl use. Once the price is set, no turning back because ppl who bought it will make noise.
11) Factory workers: Benefits control by UNIONs, bonus must be given.
12) Expertises Engineer: Limited always move around from company X to Y to Z.
13) Depend on Suppliers in each countries. Quality control and cost is vary.
Therefore! Some BOSS might thought about reducing the risk.
One possible way is to buy all the companies and MERGE into one! All profit from Shop A and B is the same BOSS.
But problems:
1) IF Shop A and B managed by the same BOSS but the foods still made by the same group of ppl. Definately, Customer still complaint shop A because Shop B offer extra egg compare to Shop A.
2) Communication problems, different ppl had different taste and difficult to change it and controlled by other ppl. you cannot fired all or 100% replacement.
3) High expanses, profit still depend on the original group of customers, example Shop A customers has 10 ppl and Shop B customers has 30 ppl. Any promotion offer by A ppl just shift from B to A but the total still 40 ppl max. Always A win B lost, B win A lost.
This group are: GM, DC, Ford,……but Renault-Nissan case is LUCKY. As you all understand one of a million chance, but still a chance rights.
Another BOSS tought about new way. It is TOYOTA.
In stead of buying the shops, why not focusing on new Products, use the money to invest new machine and make new products. Unless they don't have that technology (the case of DAHATSU) then had to buy it.
This new shop C not even selling the common food (KARIBAU and TEH TARIK with or without egg), They also selling PISANG GORENG (including the LEXUS) at the same time. Eventually the had call out all the customers from Shop A and B now PLUS new customers so the total is More than 40 ppl.
That is the success story of TOYOTA compare to other GIANTs company. But POTONG??? Join or no join, MERGE or no MERGE it still consider is a mystery to Be success, Coz the BOSS still sleeping in the middle of no way! WAKE UP POTONG!!! time out!!
Manufacturer wants to make as common as they can on all the product, this is to leverage on the volume and keep cost and varience down. But the problem is, the new age consumers is so demanding that the designers of the car have a tough time satisfying the masses.
Furthermore, the auto market now is flooded with new cars that evolve every year/month. There will be a time when consumers stop buying, due to normal economy cycle, thus revenue will be affected. This is where the boys got trapped and the men got thru.
i do hope someday auto industries will achieve or will be like computer industries, at least at the hardware level, where we can upgrade upgrade and so on, can source parts from anywhere we like with minimum upgrades cost….total freedom!
so is proton going to the right way by dealing with nissan and renault? and furthermore, with kleemans?
i dun understand.. the merging of big companies.. the rising of china's car manufacturers.. what the hell? eh? potong dealing with nissan? reanult i know, renault + proton = savvy (1st lotus..)…. what happened with vw? they didnt buy potong's stocks? now dealing with nissan? eh paul.. explain.. i dun know what's going on….
no la that are example of good decision made by automotive company. the problem tht being mention there are world problem not malaysian only. er am i right?
Can I ask a question?
What is the PSA stands for? Never heard before.
Hmm, I never knew that Fiat is a alliance group. What are Fiat's others brands besides Ferrari?
PSA = Citroen, Peugeot
Fiat = Fiat, Alfa Romeo, Ferrari, Lancia, Maserati
wah.. fiat so keng wan ar.. swtz.. maserati oso.. :drool:
ssshheeeeeesh ! Paul … very frightening … anybody reading the article will have second thoughts before going for his big Proton interview. Like the great Mohd. Ali once said, " We got experts working on that ". … I am going to wait and hope that it does not rain in Spa.
ya, so the theme is,the more brands u have under ur belt,the more u can penetrate world market,and cheaper ur overall cost become…since only one platform can privode several model thats based on,as each brand can concentrate one one particular car segment,rather than one brand concentrating on all segments which is very costly nowadays….brands like bmw/toyota/honda already had worlwide markets few decades ago,thy didnt have to acquire to expand..bt companys like nissan/renault,daimler/benz,each had a diff market,renault mainly i europe,nissan in asia,chrysler mainly or almost all their biz is US dependant,thy wanted to enter othr markets using the benz brand….i tink if merger works,it really works,bt any litle screw up , no 2nd chance….its such a fine line…bt i believe the autoindustry is gradually evolving,bcos it has to cope with raising costs,n find othr ways to be cost effective…
Fiat also owns Iveco
10% of Fiat was previously owned by GM – but no longer
which would explain why the new Alfa 159 will come with a Holden designed V6
Thank Paul,Thank NF.
I think the AUTO business is VERY tough!
Here are some Reasons: WHY????
1) Regulation: Each countries had its own laws. Emssion, Safety, Lamps, license plate size, glass or window lights transmission and colors.
2) LH and RH side: What the hell, even Europe and England still had variations, Why can't British change and follow the majority? Of course investment needed but long terms cheaper development cost. Just make It one standard, LH or RH only.
3) Models range: From lowest 660cc until not known (7000cc). Sporty to cheap, luxury to low class.
4) Trim level: from low grade to high grade seat interiors, all the TV, radio, DVD.
5) Accessories: Spots lights, spoilers, sunvisors until Tyres, and Rims.
6) Spare parts: Each models, no matters Old or Just debut, Keep stocking the parts. If less spare parts, Customers complaints too expensive but if kept more company losing money, cost JUST TO KEEP STOCKING! Every year, 10 to 20 models launched in a country, DEAD man.
7) Service center: Technical supports and maintenance cost. Less center bad services, MORE center if no problems Waste money!!
8) RECALL: When ever something new problems occurred, unexpected by Engineers, mis-installation by workers, RECALL……CALL AND CALL……All money burns.
9) Product design, Styling and Shape: Good styling or bad styling after few years before FADE. More models debuts means more comparison of shape. Just like a shop A selling only KARIBAU and TEH TARIK, customers only order it and never complaint it, but other shops B offer KARIBAU with Egg and TEH TARIK tarik sampai Langit than customers will complaint shop A. Different nation has different taste and opinions, like Indian, china, us, europe,…Asian. Best selling models in JAPAN doesn't means BEST SELLING in MALAYSIA like Tiara and Juara case.
10) Price: You Set too high, ppl said TOO expensive not value for money, Set too low ppl said it is cheap car, only low class ppl use. Once the price is set, no turning back because ppl who bought it will make noise.
11) Factory workers: Benefits control by UNIONs, bonus must be given.
12) Expertises Engineer: Limited always move around from company X to Y to Z.
13) Depend on Suppliers in each countries. Quality control and cost is vary.
Therefore! Some BOSS might thought about reducing the risk.
One possible way is to buy all the companies and MERGE into one! All profit from Shop A and B is the same BOSS.
But problems:
1) IF Shop A and B managed by the same BOSS but the foods still made by the same group of ppl. Definately, Customer still complaint shop A because Shop B offer extra egg compare to Shop A.
2) Communication problems, different ppl had different taste and difficult to change it and controlled by other ppl. you cannot fired all or 100% replacement.
3) High expanses, profit still depend on the original group of customers, example Shop A customers has 10 ppl and Shop B customers has 30 ppl. Any promotion offer by A ppl just shift from B to A but the total still 40 ppl max. Always A win B lost, B win A lost.
This group are: GM, DC, Ford,……but Renault-Nissan case is LUCKY. As you all understand one of a million chance, but still a chance rights.
Another BOSS tought about new way. It is TOYOTA.
In stead of buying the shops, why not focusing on new Products, use the money to invest new machine and make new products. Unless they don't have that technology (the case of DAHATSU) then had to buy it.
This new shop C not even selling the common food (KARIBAU and TEH TARIK with or without egg), They also selling PISANG GORENG (including the LEXUS) at the same time. Eventually the had call out all the customers from Shop A and B now PLUS new customers so the total is More than 40 ppl.
That is the success story of TOYOTA compare to other GIANTs company. But POTONG??? Join or no join, MERGE or no MERGE it still consider is a mystery to Be success, Coz the BOSS still sleeping in the middle of no way! WAKE UP POTONG!!! time out!!
It a matter of regulated and deregulated.
Manufacturer wants to make as common as they can on all the product, this is to leverage on the volume and keep cost and varience down. But the problem is, the new age consumers is so demanding that the designers of the car have a tough time satisfying the masses.
Furthermore, the auto market now is flooded with new cars that evolve every year/month. There will be a time when consumers stop buying, due to normal economy cycle, thus revenue will be affected. This is where the boys got trapped and the men got thru.
We'll wait and see.
i do hope someday auto industries will achieve or will be like computer industries, at least at the hardware level, where we can upgrade upgrade and so on, can source parts from anywhere we like with minimum upgrades cost….total freedom!
…just a dream maybe…..
when will the Satria RM be available in the mkt ?