GM holding distributorship talks with Naza group

Thursday December 31, 2009 GM holding distributorship talks with Naza group By EUGENE MAHALINGAM

PETALING JAYA: US car manufacturer General Motors Corp (GM) is in talks with several potential parties, including the Naza group, for the exclusive distribution of Chevrolet vehicles in Malaysia, according to an industry source.

�GM is already talking to a few parties. They are also in the process of discussing with Naza and (GM) will have something to announce by the second week of January,� he told StarBiz yesterday.

The source said GM had �excellent plans� for the Malaysian automotive market, adding that there would be new Chevrolet model launches for 2010, including the Chevrolet Cruze which was supposed to make its debut in the second half of this year.

�Yes, we are working on that (introduction of the Cruze) also,� he said.

In a joint statement on Tuesday, DRB-HICOM Bhd and General Motors Asia Pacific Holdings Co LLC said they had mutually agreed to discontinue their existing joint venture agreement to import and distribute Chevrolet vehicles in Malaysia effective Jan 1, 2010.

In the interim period, the source said GM had turned to listed Permaju Industries Bhd�s outfit, Cergazam Sdn Bhd, to manage the franchise until a new partner was found.

DRB-HICOM Bhd group director for automotive Datuk Nik Hamdan Nik Hassan said at a press conference yesterday that the partnership had ended mainly because both parties (GM and DRB-HICOM) had very different business models.

�When both GM and DRB-HICOM started reviewing the partnership between August and September, we had difficulty agreeing on certain business models. They have their own plans, we have our own.

�We have successful business plans with Honda and Suzuki that have been working well (for the Malaysian market). With that, (we felt that) the best way was to part ways,� he said.

DRB-HICOM distributes and assembles foreign marques such as Audi, Mercedes Benz, Honda, Suzuki, Mitsubishi, Isuzu, Mahindra as well as local marques such as Proton, HICOM Perkasa and Modenas.

Nik Hamdan declined to comment when asked if GM was in talks with Naza.

DRB-HICOM originally handled the Chevrolet franchise via wholly-owned Hicomobil Sdn Bhd in 2003.

The set-up was superseded in 2007 by HICOM-Chevrolet Sdn Bhd, a 51:49 joint venture (JV) in favour of GM via General Motors Asia Pacific Holdings LLC.

One business model that did not sit too well with DRB-HICOM was that GM wanted to convert all Chevrolet outlets into 3S (sales, service and spare parts) centres, Nik Hamdan said. �It�s good to have 3S but we felt it would be better to have separate (sales, service and spare parts) centres (within close proximity of each other) rather than to have everything under one roof. It depends on the strength of the brand and it costs a lot of money to set up these centres.

�It takes time for the dealer to invest in a 3S centre. As the dealer gets more involved with the brand, only then can the dealer invest more money in turning the outlet into a 3S centre,� he said.

There are currently seven Chevrolet outlets in Malaysia.

Nik Hamdan also said the termination of the JV would not have an impact on DRB-HICOM�s earnings as contribution from the Chevrolet marque was minimal.

�Contribution in terms of sales in the past one year has been minimal. In fact, when we had 100% distributorship (under Hicomobil) we sold nearly 14,000 cars.

�When the JV came in, we only sold 1,300 vehicles over the past year and a half, averaging just 65 units to 70 units a month. So it would not have a significant impact on the group,� he said, adding that there were currently about 15,000 Chevrolet vehicles on the road since 2003, comprising three main models � Aveo, Optra and Captiva.

� DRBHCOM :� [Stock Watch]� [News]

DRB-Hicom to have hybrid cars by 2012

MALAYSIAN automotive conglomerate, DRB-HICOM Bhd, aims to introduce its own hybrid car by 2012 in line with the government’s objective to promote hybrid and electric vehicles and development of related infrastructure. Group director of automotive, Datuk Nik Hamdam Nik Hassan, said the company was currently in talks with three potential partners to manufacture the car and hoped to finalise the deal next year. "Besides the assemble, we want to have our own hybrid car that we can call it HICOM hybrid. It will take 18 to 24 months to have this car to come on stream," he told a media briefing on the company’s automotive business in Shah Alam today. Nik Hamdam, who declined to name the parties, however, said one of them was DRB-HICOM’s existing partner. He said the group’s 70 per cent-owned subsidiary, Motosikal dan Enjin Nasional Sdn Bhd (Modenas), has collaborated with both Petronas Research and Universiti Sains Malaysia to manufacture its electric motorcyle. It is targeted for commercialisation by 2011, he said. Nik Hamdam said demand for hybrid car was increasing although the price was a little bit expensive compared to conventional car as the people's interests were now towards eco-friendly vehicle. DRB-HICOM is a distributor and assembler of prime foreign marques such as Audi, Mercedes-Benz, Honda, Suzuki, Mitsubishi, Isuzu, Mahindra as well as local vehicle such as Proton, HICOM Perkasa and Modenas. He said the company targeted to increase its market share to 22 per cent in 2010 from 19 per cent now with the focus on enhancing performance, especially in the after-sales and service activities. Nik Hamdam said the country’s total industry volume of vehicles was forecast to reach 540,000 units in 2010 from 525,000 units estimated in 2009. The company planned to launch at least 10 new models and upgrades of its various marques and this expected to spur its automotive business next year, he said. "Among them would be the Audi A5 and Audi R8, including two new models from Suzuki," he said. He said DRB-HICOM would pump in RM10 million for advertising and promotion activities by next year to strengthen the Audi brand presence. On the discontinuance of existing joint venture between DRB-HICOM and GM, Nik Hamdam said: "We are having difficulty to agree on certain point of their business model. Both of us have different objectives." Nik Hamdam said although the parties had now agreed to amicably part ways effective Jan 1, DRB-HICOM would continue to supply the spare parts of Chevrolet vehicles until the appointment of a new distributor by GM. "The termination will not have a significant impact on DRB-HICOM's performance as sales contribution from Chevrolet was small at about 1,000-1,300 units per annum compared with its total volume of close to 100,000 vehicles annually," he said. He said DRB-HICOM was looking to bid for stake in Proton once the opportunity arose. "This is something that we always look out for because we are much involved in Proton business," he said. BERNAMA

Slow Nano delivery leading to cancelled bookings

The Tata Nano was launched to great reception back in March, but around 15% of the 207,000 Indians who put down names in the order book have cancelled their bookings, as delivery of the “Rs 1 lakh car” is taking too long, according to Hindustan Times. 100,000 initial applicants were chosen randomly to be first for deliveries from July on.

“A number of those who expect to get their Nanos around March 2010 or later are cancelling bookings,” said Krishan Bansal, proprietor of Raghuvanshi Enterprises in New Delhi. “There are other new cars in the market for which people don’t have to wait,” said another dealer. “People don’t mind shelling out a bit more to get their car immediately.”

Tata shrugged off concerns, saying that some cancelled bookings was not unusual. “The capacity of our Pantnagar plant is limited but we plan to deliver 100,000 cars by the last quarter of 2010,” said a spokesman.

Indian consumers looking for a small car have plenty of options on the way. Honda will launch its New Small Concept and Toyota has promised a compact car for the upcoming India Auto Expo. Of course, there are also current favourites from Maruti Suzuki and Hyundai.

Source

Petronas deal to sponsor Mercedes GP was a business decision

KUALA LUMPUR, Dec 28 — The controversial decision by national oil company Petronas to sponsor the Mercedes Formula One team instead of the Malaysian-backed Lotus F1 racing team was not made without sanction from the administration of Datuk Seri Najib Razak, The Malaysian Insider understands.

Since last week's announcement of the Mercedes sponsorship, speculation has been rife about the future of Petronas chief executive Tan Sri Hassan Merican.

Conservative hawks within Umno have also been questioning the patriotism of the move by Petronas to back Mercedes instead of Lotus F1, which has been touted here as the 1 Malaysia F1 team after the prime minister's political slogan.

But according to industry sources familiar with the deal, Hassan, who is slated to retire in February, had made a strong argument for backing Mercedes to the government.

"Tan Sri Hassan would not have done this without sanction," a source told The Malaysian Insider about the decision.

It is understood that Petronas had considered the relative value to the company's future plans and decided Mercedes would fit into its plans better than Lotus.

Petronas is hoping that through its collaboration with Mercedes Formula One, it will be able generate business growth in the lubricants market.

Hassan and the Petronas management are understood to have argued that while the Lotus brand had huge historical significance, it did not sell many cars compared with Mercedes.

The Malaysian Insider understands that Petronas, which has been involved in Formula One for more than a decade now, was not looking at just establishing a brand presence through its motorsports sponsorship.

"It is about building a market for lubricants, and that can be achieved better with Mercedes and Michael Schumacher," a source told The Malaysian Insider, in reference to the return to racing of the legend in the Mercedes team.

Another factor that was considered in Petronas' decision was the fact that despite the government's backing, the Lotus F1 team would not be known as the 1 Malaysia F1 team. It has been officially entered as the Lotus F1 team.

The Petronas decision has piled the pressure on Lotus F1 boss Datuk Seri Tony Fernandes, who also controls AirAsia, to bring in the funds needed for his team.

Fernandes had hoped to bring Petronas on board given that his team has government support and his airline is a major purchaser of aviation fuel. The Lotus car company is also owned by Proton.

With no other local company either having the funds or seeking a global presence, Lotus F1 is likely to have to go global in its search for a major sponsor.

Lotus F1 was understood to have been seeking US$85 million (RM297 million) in funds from Petronas.

Eco-cars set to shake up domestic market

 

 

 

Initially, when the eco-car project was bought to the discussion table several years ago by the government, some auto companies and analysts believed it would damage the pickup market. So the project was postponed until 2007.

Auto-makers are however beginning to change the way they look at things now, and many are talking about how the eco-car will actually boost the size of the market. The total domestic market this year is estimated at close to 520,000 vehicles, while in past years sales have been as high as 700,000-plus.

"Two players will enter the eco-car segment next year, Nissan and Honda. While Nissan is set to launch in March, Honda is expected to launch in the last quarter of 2010. With a few months of sales, eco-cars will boost the market by about 5 per cent.

"They will take some sales away from the pickup segment and the 'B' passenger-car segment, not to mention smaller brands like Proton, Chery and Naza. A majority of the new customers, however, will be new, meaning first-time car buyers. Expect the total market to reach 600,000 units next year," said an industry insider.

Aside from eco-cars, elevating the market will be the B-car (subcompact) segment, which also promises lower fuel costs.

During its launch month of November, the Mazda2 sold 1,015 units. Sales have been so strong that Mazda Sales Thailand has asked AutoAlliance Thailand - operator of the Ford-Mazda joint-venture plant in Rayong - to increase output to keep pace with soaring bookings.

Mazda Sales Thailand managing director John Ray expects the B-car segment to grow 9-10 per cent this year, and by a similar amount next year. It is expected to account for 115,000 vehicles this year.

B-segment cars represent 22 per cent of automobile sales in the Kingdom. They also make up 40 per cent of all passenger cars sold in the country.

As the focus is on small cars, this could lead to a change in the market ratio between pickups and passenger cars. The eco-car is set to draw low-end pickup buyers, who usually pay about Bt380,000 for a vehicle and can now turn to a new sedan.

"The eco-car will takes sales from pickups and could effect the cheaper B-segment sedans," said Ray. "But it's unlikely to affect higher-up products like the Mazda2, Honda Jazz, Toyota Yaris and the soon-to-come Ford Fiesta. These customers wouldn't buy these vehicles if they were so worried about price. It's a different class altogether."

Market analysts at Mazda and Chevrolet expect the Thai market to even reach a balance of 50:50 between pickups and passenger cars in the next two years, against the 60-per-cent pickup share of previous years.

Besides the pickup market, the eco-car will also affect the second-hand car market. People who currently cannot afford a new vehicle have to turn to the used-car market. Prices for used B-segment cars are likely to drop after the launch of the first eco-car.

The auto market next year is not expected witness the same turbulence as in 2009, when sales fell heavily in the first quarter - bottoming out at a year-on-year contraction of 33.4 per cent.

Thanks to stimulus packages, the market picked up strongly. The overall market in the first 11 months reached 476,786 units, down 14.3 per cent, which is the lowest contraction this year. The decline in the passenger-car market is now down to only 1.7 per cent, while the pickup market is down by 20.7 per cent.

Shedding light on the industry's revival is also the fact that in November, auto production marked the first annualised increase in 13 months, according to the Federation of Thai Industries' Automotive Industry Club.

Although output in the first 11 months of the year was only 887,656 units - a 32.21-per-cent drop from the same period last year - all players are now more positive about the outlook.

While passenger-car production from September to November reached 339,418 vehicles, output during the December to February period is forecast to rise to 345,880 units.

Auto analysts are now looking at a 570,000-unit domestic sales figure for 2010, which would be equivalent to 10-per-cent growth, but some say sales could reach 600,000 units if there were nothing of a major nature stalling economic recovery.

Along with the decline in the domestic market, export markets for Thai automobiles have also been heavily affected. But along with the local market's recovery, exports have also started to pick up.

October exports were the highest since December last year and 20 per cent higher than in September, while export value was down by just 5 per cent compared to the same month last year.

As overall auto output is expected to hit 1.2 million units next year, the eco-car will further boost Thailand's position as the "Detroit of Asia". Under Board of Investment rules, each producer has to meet the 100,000-unit annual output target within five years.

Everyone is watching carefully developments on stimulus measures here and elsewhere, as these will be the key to boosting auto demand in the year to come.

 

 

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Historical kopitiam

A plum place for a good, quick meal: The coffee shop has a lineup of traditional hawker favourites (below, right).

At Lai Foong, it is the tantalising claims of the beef noodles� aphrodisiac qualities that take centrestage. From the tongue to the penis, right up to the slivers of tendons and brisket, the diner will find some very exotic parts of the cow in the aromatic broth.

Whether the claim is true or not, the reputation of Lai Foong�s beef noodles for being able to give �strength� is almost as old as the building.

Surprisingly, Thomas Tan, 44, the beef noodle man, is blissfully unaware of the Viagra-like properties attributed to his popular fare. The only thing he will vouch for is the stamina-giving effect of the soup which is based on an authentic 80-year-old Hainanese recipe passed down by his late grandfather, Chou Jou.

Thomas surmises that it is the constant tasting of this vintage brew that has enabled the beef noodle stall to open every day without fail since his father, Len Chuan, started business at Lai Foong in 1956.

�My father was a disciplined man in the sense that he never missed a day of work until he retired 15 years ago,� reveals Thomas who started helping at the stall during his primary school years.

�There were three things my father always observed. The first is to be at the stall by 4am every day for the preparations. The second is to be punctual with the opening and closing times. The third is to maintain consistency in taste and quality. There was no such thing as �Aiyah, nevermind-lah. I�ll take a rest today and open tomorrow�. He would never tolerate such behaviour from any of us,� says Thomas, the seventh of 11 siblings.

Recalling the earlier days, Thomas reveals that Len Chuan had left the island of Hainan and had come to Malaya by boat in 1953.

�My father�s first job was at a tin mine in Perak. After three months, it dawned on him that there might be better fortune to be made in Kuala Lumpur. I guess it was also due to my grandfather�s influence as he was a firm believer that it is always better to be one�s own boss,� says Thomas.

Recalling how his father came to settle at the present location, Thomas says he had chanced upon an advertisement offering the rental of stall space at the then newly-built Lai Foong coffee shop while he was scouting around for a place to set up his business.

Today, this old world coffee shop is run by Len Chuan�s children. One is Daniel, 40, Thomas� younger brother. Both are former students of SM Vivekananda in Brickfields.

Daniel who entered the business in the 80s, reveals that the coffee shop is named after the original owner before his father took over the lease of the shop from The Rubber Trade Association of Selangor and Pahang.

Though Daniel does not know the current whereabouts of the owner�s family, he remembers meeting a Wong Lai Cheong, believed to be the owner�s daughter who managed the shop and ran a dim sum stall within the premises. Three other hawkers who sold fish ball soup, prawn noodles and chicken rice beside Len Chuan�s beef noodle stall when he started in 1956 have also retired due to old age.

Still, there was no doubt that Lai Foong had been a �happening� place back then and it was rumoured that famous names like Yeoh Tiong Lay and Teng Peck Kheng would eat here.

The 80s also saw visits from Hong Kong film star Liu Wai Hung (better known as Ah Charn) who was a popular name in the 80s and 90s.

Expectedly, the hawker menu has retained much of its reasonable pricing and traditional flavour with offerings like fried kway teow, pork noodles, chicken rice and wan tan noodles with thick slices of char siew.

There is a personal endearment to the wan tan mee here as Loo Yoke Ying, 45, the wan tan lady, makes the loveliest meat dumplings. There is also a certain springiness to the egg noodles, which are best savoured dry with black sauce.

Sharing star billing with the beef noodles is the peppered pork stomach soup. Yeow Peck Sze, 56, the stomach soup lady who has been at Lai Foong for the past 10 years, says this traditional dish is becoming rarer in hawker food circles due to the complicated cleaning process of the pig stomach. But it is still much sought after by diners as it is believed to improve vitality and stomach functions.

Interestingly, it is a Chinese belief that eating a certain part of an animal�s internal organ holds parallel benefits for the diner�s inner functions as well.

The chicken rice stall run by Wooi Juin Kit, 22, is also notorious for long queues at lunch time. This can be attributed to the flavourful roasted meats. Naturally, the crackly skin of the roasted pork is a delicious but sinful indulgence.

The tiger prawn yee mee is another yum yum. Lathered with egg sauce, the tiger prawns come with thick, rich orangey roes. There is much to look forward to from this talented sei chow cook, Lee Yong Cheng, 25. From observation, he also does great Hokkien noodles as well.

Proton to unveil new design direction in 2010

Proton’s head designer Azlan Othman tweeted the above on his Twitter account a few days ago – it looks like we’ll be able to look forward to a showcase of a new look for Proton cars next year!

It was reported earlier this year that Italdesign-Giugiaro (which recently penned the Ssangyong C200 Concept) was hired to help Proton out with the new global Persona full replacement model and a clay model of the new car already exists at the design house’s HQ in Italy. They could also be helping Proton out with its new family design language?

We assure you Azlan, we’re definitely looking out for an announcement soon!