From finance twitter.com
Dollar for dollar, people are still wondering why locally designed and built cars are still more expensive than imported foreign cars in the same class. At 1.6-litre segment, a latest 2012 Ford Fiesta cost about US$16,000 in U.S. but a local Proton Persona cost a whopping RM49,000. A new 2012 Toyota Camry 2.5-litre in United States cost merely US$30,000 but it is costing you a leg and an arm at RM183,000 here. Hence an American with monthly salary of US$3,000 could own a Camry with his 1-year salary while a Malaysian requires about 5-year salary to own the same car, dollar-to-dollar speaking. Even after converting to Malaysian Ringgit, the Camry should cost you roughly RM90,000 instead of RM183,000.
If you’ve been living in the cave for the last 30-years, Malaysia’s automobile sector is protected from foreign competition by barriers of investment-approval permits, differential excise taxes, import duties, sales taxes and whatnot. It was a beautiful multi-layers of barricade specifically architected and designed by none other than former premier Mahathir Mohamad to protect Proton, his pet project. For years since the 1983 National Car Policy, Proton made tons of money thanks to the protection policy – the local automaker became Asean’s largest car producer in the process. Proton became arrogant and didn’t care about qualities so much so that its local buyers were left without any solution for decades about its once-infamous-power-window problem.
Then in 2001, came (former) Thailand Prime Minister Thaksin Shinawatra who formulated Thailand’s master plan for industrial development – of which “Detroit of Asia” was part of it. Little did Mahathir and his regime realize what would hit their “Jaguh Kampong” Proton. By 2003, Thailand overtook Malaysia as the top vehicle producer in the region but Malaysian ministers were still in denial mode and pooh-pooh the “Detroit of Asia”. Nevertheless, National Automotive Policy (NAP) was introduced in 2006 to arrest the decline in Malaysia automotive industry but it lack real substance.
DRB-Hicom has just acquired Proton and the current Proton’s MD Syed Zainal, the person credited to the success of new Proton Saga and coming Proton Prevé, is rumoured to be resigning. DRB-Hicom COO Lukman Ibrahim who once held a top managerial position in Perodua is said to be the replacement. DRB-Hicom currently assembles Volkswagen Passat with Jetta and Polo in the pipelines. The question is whether DRB-Hicom under the new leadership will rebadge some of Volkswagens as Proton models as in the case of Proton Inspira, the carbon copy of Mitsubishi Lancer.
Malaysia has to honour what it promised. The government promised to abolish APs by 2010 but has since pushed it to 2015. The government also promised EU4M diesels to be introduced in 2011 but nothing happens and the poor BMW actually thought Malaysian government was serious about it so much so that they actually launched clean diesel models ahead of the date. Now, every foreign car manufacturers know they can’t trust current Malaysian government at all. Will we see a tsunami in the automobile industry soon? Maybe we shall wait for the NAP 2012 and the coming general election before decide whether it’s wise to book a new car