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DRB-Oriental-Honda Sdn Bhd (DOH), the new joint-venture company that will take over manufacturing, distribution and marketing of Honda vehicles in Malaysia from July 1st 2001, has announced that it will not be making use of an existing plant but will build a brand new plant in Malacca. Earlier, the company had been investigating the possibility of using either the AMM plant in Pekan, Pahang, or Oriental Assemblers in Tampoi, Johor. Using an existing plant would have reduced construction costs and enabled an earlier roll-out of vehicles although Honda would have virtually rebuilt the plant to its standards and installed new equipment with a higher level of automation.

Until recently, it was rumoured that if DOH was going to build a new plant, the site would be in the Klang Valley, a logical choice given the many suppliers already established in this area. DRB-HICOM had also hoped Honda would consider Proton City, a large industrial estate near Tanjung Malim, Perak, which Proton was to have used for a mega-factory complex but has deferred for the time being.

There are a few automotive component suppliers in Malacca but this would be the first vehicle assembly plant in the state. Though a seemingly unusual choice to set up such a plant, it should also be noted that the location is between two major ports – Pasir Gudang in Johor and Port Klang in Selangor – which is useful for logistics. Being on the west coast, transportation costs are also less to distribute vehicles to the major urban centres.

The new plant will be at a 32-hectare site near Pagoh in an industrial estate established by a DRB-HICOM subsidiary. The total cost of the plant, including the purchase of land, is RM170 million and the installed capacity will be 20,000 units a year. Construction will begin this September and should be completed within a year, with the first units rolling out in early 2003. Until then, DOH will continue to have its vehicles assembled under contract at Oriental Assemblers, which has been assembling Hondas since the late 1970s.

According to Mitsuru Ozaki, DOH Managing Director/CEO, the models to be assembled will be similar to what is presently available now: the Accord, CR-V, Civic and City. The entire output will be for the Malaysian market, with an initial forecast of 8,000 units a year. There was a rumour that the Odyssey MPV would be assembled but this is not going to be the case. However, Mr Ozaki revealed that Honda is also looking at some other models that customers are likely to want in coming years.

“We think that our customers will want MPV-type models in future which can carry more people on board so we are studying the matter and will see which model in our range is suitable and perhaps we will assemble it later on,” he told AUTOWORLD.COM.MY’s Chips Yap during a recent media event in Lumut, Perak. Mr Ozaki added that wagon-type models were also being considered.

On why Honda has decided to invest in a new plant in Malaysia even though the country has delayed opening its auto sector under AFTA till 2005 – a move which does not make it possible for exports to other ASEAN countries – Mr Ozaki said that Malaysia has the largest passenger car volume in the region. Admittedly, 85% of that volume is taken by Proton and Perodua but Honda still feels it wants to maintain and strengthen its presence in preparation for the time when the conditions are equal for all companies.

Mr Ozaki said that Honda would definitely want to export cars from its new plant in future and would also allocate specific models to each of its plants in ASEAN so as to get economies of scale. In the meantime, the company will make use of the AICO scheme which allows for duty-free exchange of components among ASEAN countries. This scheme has been used extensively for the new Civic which is why it appeared here so fast after the launch in Japan.

Honda’s decision to establish a new joint-venture for upstream activities is due not only to various issues it has had with Kah Motors in recent years concerning marketing strategies, particularly on the way accessories have been forced on customers, but also its need to control manufacturing more closely. By being directly involved in manufacturing, Honda can achieve even greater cost reductions and this will improve its competitive position in years to come. The new plant will have higher automation and more efficient production processes, lowering production costs which can translate into lower retail prices. Just how much lower is unknown at this time since it will also depend on the tax structure in coming years but there should be change in pricing in due course.

Build quality is a very important thing for Honda and Mr Ozaki said that it will have the highest priority, besides attention to customer needs. “In ASEAN, we consider the vehicles produced at our own plant in Thailand as the highest quality and we want to also achieve the same quality level in our Malaysian plant,” he stated.

On the retail side, contrary to rumours, there will be no change in the dealer network and no DRB unit is presently considered for selling Hondas. Mr Ozaki said that Honda recognises that Kah Motors has already built up a strong network around the country and this will continue to be used.

“We have no plans to stop using Kah Motors for our sales network and won’t be creating a new network,” he emphasised. Of course, by 2005, the situation may be different and there is always the possibility that DRB may ask Honda to consider using some of its EON outlets to sell Hondas when Proton sales decrease significantly. Oriental Holdings (the parent company of Kah Motors) with its 15% stake in DOH may not be able to do much if such a proposal is made, which is why Oriental has taken on the Hyundai franchise.

The ASEAN market gets a lot of attention from Honda these days not only because of the coming regional free trade provisions but also the fact that in this part of the world, Honda is much more competitive against Toyota.

“Honda and Toyota compete very aggressively all over the world and in most countries, Toyota is stronger. However, in ASEAN, our positions are often close and that is why we want to strengthen our presence here and in other ASEAN countries,” Mr. Ozaki said.

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One of the many frustrating things for a motorist in Malaysia has been to get hit by another vehicle and not be able to get compensation easily from the other party (if the other party is guilty). Either compensation can be received on the spot if it’s a small amount or, as provided by the law, you can submit a claim to the other party’s insurance company. The problem is that such an approach can take ‘forever’ unless it is a big claim or one which goes to court.

Because of the hassles involved in making a claim to another insurance company, many motorists usually decide not to bother and spend their own money on repairs. So the insurance companies win through their lax way of responding to claims.

It is also possible to claim for compensation from your own insurance company but that means you lose your precious NCD – the No Claims Discount that can be as high as 55% after 5 years – and for many people, maintaining the NCD is often a greater priority. So they also avoid from making a claim unless the damage is so severe that the cost is going to be very high.

Now the insurance industry has come up with a new option that is one of the rare times when motorists get a decent compensation provision. Motorists can now claim from their own insurance company for damages cause by other parties if they themselves are not the gulity party – without losing their NCD.

PIAM, the insurance industry association, says that this new option, which came into effect on June 1st 2001, is aimed at helping motorists expedite their claims. However, it only covers damage to the vehicle and not other types of claims concerning loss of life or damage to other properties. As with all accidents, a police report has still to be made and the findings of the police will determine whether the motorist can claim under this new option.

This new option also reduces the risk of a motorist suddenly losing his or her NCD if someone makes a claim for damages through his insurance company. Although the motorist himself may not make a claim, any sort of claim from another party is also considered a claim and the policyholder still loses the NCD completely.

While this move will be welcome by motorists – no more hassles trying to find out the other party’s insurance company and submitting a claim – it could also have serious implications on the insurance industry which always claims to be losing money in its automobile side of the business. Where many claims may not have been made in the past as motorists simply did not want to go through the hassles, there may now be more claims made, especially when loss of the NCD is not an issue.

However, it should also be remembered that many policies have a clause which requires the policyholder to bear the first few hundred or thousand ringgit of a claim, so it won’t be much point making a claim for a broken headlamp!

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Today’s car buyers have it so much easier when it comes to getting a hire-purchase loan. In decades past, buyers sometimes had difficulty getting loans but nowadays, the finance companies are eager to provide you loans and would do much to get your business (provided you qualify, of course). Generally, the application for a Hire-Purchase (H-P) loan can be handled by the company selling you the new or used car as they have their contacts with certain finance companies.

It is also possible for you to get your own loan as you can visit any finance company and make the application. This, however, is time-consuming and many people may not have the free time to run around town for the purpose. Most therefore prefer to just ask their salesman to handle the matter for them, rather than enjoy the freedom of making their own choice.

Recognising the limited time that consumers have and wanting to give them the best deal possible, Hong Leong Finance Berhad (HLF), a leader in H-P financing for automobiles, has come up with innovative approaches to make getting a loan easier. Besides having branches in major towns around Malaysia, the company has also set up a Call Centre with a toll-free number (1-800-18-8828) which customers can contact when they want to apply for a loan. There are also In-Store counters at Carrefour hypermarkets where applications can be made, not just for H-P loans for vehicles but also other financial services such as housing loans, unit trust investments and even credit card applications.

The increasingly popular channel is the On-Line Loan Facility which was introduced about two years ago. The first of its kind in Malaysia and still the only one available for Internet users, HLF’s On-Line Loan facility is clearly the easiest way to get a loan. You can do it at any time of the day and any day of the week from the comfort of your desk at home or in the office – no parking hassles and facing jams. And should you be a globe-trotting executive, you can also make the application from Hawaii if you can get access to the Net!

Reaching Out
“The traditional method has been to visit finance companies personally to apply for a loan. But we know that people are very busy nowadays and we want to offer them more convenient ways of getting a loan,” explained Ser Wee Chua, HLF’s Senior Manager – Business Development. “It is up to us to reach out to our customers around the country and offer them facilities which are speedy and convenient, hence the availability of the three channels.”

According to Ser, the three channels are increasing in popularity as consumers are becoming more aware of them. While they do not entirely dispense with the need to physically visit a branch at some point during the process, they eliminate a number of preliminary steps, saving time and effort.

As the Internet age progresses, doing business on-line is becoming a way of life and it is clear from the growing number of applications that HLF’s On-Line Loan Facility is popular. Declining to reveal actual numbers, Ser said that the On-Line channel is definitely accounting for a growing number of applications received by HLF through its non-traditional channels.

“While it is an electronic transaction, unfortunately, due to present circumstances, it is not possible to do everything without some physical interaction. This is because we still need to verify the applicant’s identity and view certain documents. Perhaps in future when there are secure electronic means of verifying identities and providing required information as well as a legalised form of digital signature, a customer will not need to go to a branch at all,” he said.

Aiming to promote the On-Line Loan facility as much as possible, applicants using this channel can get attractive interest rates, repayment periods up to 84 months and even generous margins of financing. However, it also depends on the applicant’s income level and ability to repay the loan.

“It helps if they are already a HLF customer as we would then have a record of them and processing can be faster. But even if they have never taken any loan or banked with Hong Leong before, we still consider all applications and make an assessment based on the applicant’s background and income,” Ser explained.

Quick conditional approval
If the applicant’s income is of a level that is appropriate for the loan being taken (and other criteria are met), a conditional approval can be given within 24 hours or less (unless it is a public holiday or weekend). What this means is that the applicant is informed that the loan is available, subject to HLF receiving all required documents (identity card, income tax return form, pay slip, etc) and finding them matching the information provided in the on-line application form.

“The speed of processing is a strong point of our On-Line facility and applicants can also check the status of their application on-line, something which no one else offers at this time,” said Ser, adding that there are no extra costs to using the On-Line facility.

“More important for the customer is the knowledge that the loan issue has already been settled and is available. This means that he or she can go to a car dealer and negotiate with a bit more ‘strength’. There need not be discussions on financing with the salesman and because HLF is a reputable finance company, there will also be no problems when saying that a loan has already been approved by the company for the customer,” he explained.

To present the required documents and sign the application forms, you can select any HLF branch convenient to you, and there are many throughout East and West Malaysia (the whole network is listed on the website).

“We believe that customers should not be told by us where they should go to process their application but that they should be given the freedom to choose which location is convenient to them,” said Ser.

For loans involving new vehicles, the process is slightly easier as the HLF branch handling your application can liaise with the car company concerned. As a service to customers, both HLF and the car company will relieve the customer of having to run around and exchange all the necessary paperwork.

However, for a used vehicle, it is necessary for an officer from HLF to view the vehicle to verify its existence, condition and engine/chassis numbers. The all-important original registration card must also be furnished to ascertain if the vehicle is still under another H-P loan.

“We need to do this to protect our customers’ interests since they are taking a loan,” explained Ser. “As you know, there are cases of fraud and we need to be sure of the vehicle since we are giving out a loan. It helps a bit if the vehicle is still under the ownership of another finance company as it would be easier to confirm ownership.”

He revealed that on-line applications for used cars are a bit greater than for new cars, This is perhaps due to the fact that companies selling new cars have links with finance companies and can assist with getting loans whereas used car buyers – especially those buying from private sellers rather than used car dealers – often have to find their own loans.

In any case, whether it is for a new car or a used one, HLF’s On-Line facility also provides access to a comprehensive range of services. Once contact is made and conditional approval is given, the customer can also obtain insurance coverage.

Money-saving scheme
Another unique benefit of using the On-Line facility is that applicants can also choose the Hibah scheme, a scheme that is the first of its kind in Malaysia. This scheme is an Islamic hire-purchase service based on the Syariah Principle of Al-Ijarah Thumma Al-Bai (AITAB) which gives cash rewards to customers. Though provided for Muslims, the scheme is also available to non-Muslims who apply using the On-Line facility. However, it is restricted to individual customers and limited to passenger cars including MPVs, 4WDs and Vans which will be registered for private use.

Those who take a H-P loan using this scheme will receive a 1% cash reward based on the loan amount, but they have to pay their monthly instalments promptly for the period of 12 months. They cannot incur any charges such as late payment or reminder fees during the hibah period. Also, customers are not encouraged to early settle within the hibah period. If any of these two exceptions occur, customer will not earn their “hibah“. The “hibah” that has been earned by a customer will be credited to his/her savings account after the 13th month due date. As such, customers need to open a savings account at a Hong Leong Bank branch when they apply for financing.

“HLF has put in a lot of effort to making the process of getting a car loan as user-friendly as possible. And I believe that we offer the most comprehensive on-line facility for this purpose,” declared Ser.

He is enthusiastic and very optimistic about the future of On-Line loan applications but does not expect to see a decline in the traditional methods happening so soon. This is because there are still many people who prefer face-to-face interaction, especially when it comes to divulging personal information. There are also some people, (mostly the older generation) who are not so comfortable using a PC, let alone getting on the Internet to do business.

“It’s HLF’s aim to be the best in offering financial services and we can only achieve this goal if we give our customers the widest range of ways to interact with us”, he said.

“Even if someone is not intending to buy a new or used vehicle right now, it costs nothing to make an on-line application for a loan. If nothing else, at least the person will know how much he or she can get when the time comes and the need for a loan arises,” suggested Ser.

To go straight to the HLF On-Line Car Loan application page, click here.


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Auto Bavaria and its authorised dealers are now offering the most powerful version of the BMW 3-Series, the 330i, which complements the locally-assembled 318i and 325i models.

The 330i comes with a 3.0 litre variant of BMW’s latest M54 engine. The powerplant, with BMW’s legendary in-line six configuration, is boosted by ‘Double Vanos’ and delivers 170 kW (231bhp) and 300 Nm of torque. Factory performance claims show acceleration from 0-100 km/h in 6.5 seconds.

BMW, in recognising that power must come with control, has equipped the 330i with an integrated safety concept. Safety features such as the Automatic Stability Control + Traction (ASC + T) and Cornering Brake Control (CBC) keep the 330i firmly under control even in the most unexpected circumstances.

With up to eight airbags, including BMW’s Inflatable Tubular Structure (ITS) head airbags that extend diagonally across the front side windows, occupants are assured of protection from head and spinal injuries in the event of a collision.

Luxury fittings found in the 330i include Montana leather seats throughout, multi-function steering wheel and automatic air conditioning.

The on-the-road price for the imported 330i from Auto Bavaria is RM352,942.50 (personal registration, excluding insurance).

According to Auto Bavaria General Manager – Sales and Marketing, Tunku Badlishah bin Tunku Annuar, buyers of the imported model have the peace of mind of knowing that their cars are fully tropicalised and backed by full warranty and service support from Auto Bavaria.

“Owners will also enjoy a host of value added programmes exclusive to Auto Bavaria customers that are synonymous with the unique BMW Lifestyle. These include the renowned BMW Driver Training, which no other car manufacturer or distributor in Malaysia offers,” he said.

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With every unit of the present locally-assembled Toyota Corolla already having a customer waiting, UMW Toyota Motor is now embarking on a campaign to slowly reveal the next generation that will debut during the third quarter of 2001.

Apart from teaser ads in the newspapers, the company is also handing out leaflets of the new model and salesmen are giving indicated prices too. When approached for more details of the new model, a senior executive of the company said that information for the media would only be made available ‘in a few months’. So for those who have not yet visited a showroom to ask questions, AUTOWORLD.COM.MY provides this report based on whatever is currently available.

From the pictures in the leaflet, it is clear that the new Corolla being assembled in Malaysia is not the same as the one sold in Singapore, a version which is now being called the ‘Japanese version’ within the company. Apparently, the Malaysian version is a specially-styled variant called the Corolla Altis and an earlier announcement by Toyota described this version, unveiled at the Bangkok Motorshow not so long ago, as the ‘Asian Corolla’.

The different styling – with a longer body – could well have been inspired by less-than-positive response to the Japanese version that was launched almost a year ago. The rounded Corolla, nicknamed uncomplimentarily as ‘potato’ by some customers down south, was not well accepted by Toyota’s distributors in many countries too. It is believed that the experience with the previous generation led Toyota to consider the input of their distributors more seriously and develop a variant on the same new platform.

The styling of the Corolla Altis is certainly very attractive and from public response so far, it has a promising future ahead. In fact, a rival distributor has already said it will storm into the market and affect sales of its popular model.

The big question is, of course, the price. And Toyota salesmen are already providing the answer: RM103,000 for the 1.6 manual; RM110,000 for the 1.6 automatic and RM122,000 for the 1.8. The indicated prices show that, contrary to rumours, the price will not be beyond RM110,000 for the Corolla 1.6 but the addition of a 1.8-litre version is interesting while there is no mention of a 1.3-litre version.

Apart from the fresh new styling, the big thing will be the change to a brand new engine family – the new ZZ series – which will see variable valve timing in a locally-assembled Toyota model for the first time. Toyota’s version is VVT-i, for Variable Valve Timing – Intelligent. With VVT-i, the engines, both DOHC with 16 valves, put out 100 kW/136 ps (1.8) and 81 kW/110 ps (1.6) with shallower torque curves than before, suggesting fairly good flexibility in all speed ranges. For optimised sparking, there is distributorless direct ignition.

The automatic gearboxes come in two varieties, the 1.6 getting a conventional but electronically-controlled transmission while the 1.8 has a ‘4-speed gate type with Super ECT’. Drivers will be able to choose between Power and Economy shift programs at the touch of a button. A shift lock safety device is incorporated which requires drivers to press the brake pedal before they can move the shift lever out of Park.

Safety takes a very big leap in the new Corolla Altis. The body construction is GOA-certified, GOA (Global Outstanding Assessment) being Toyota’s in-house safety standard that is tougher than what most countries demand. Airbags at the front will be standard and also whiplash-reducing seat designs.

On all models, ABS with Electronic Brake Force Distribution (to enhance stopping power in slippery conditions and with different loads) is standard and there is also Brake Assist, which increases brake force under certain conditions to maximise performance.

The more expensive pricetag of the Corolla 1.8 seems justified with the inclusion of Vehicle Stability Control (VSC) and Traction Control (TC). This would be the first time that a locally-assembled model in this class has such advanced features that are usually found in much more expensive cars. VSC, developed by Toyota about six years ago, works by braking wheels that are losing traction so as to prevent the car from going out of control in a turn. The system also acts on the throttle opening for the same purpose.

The interior of the new Corolla Altis is essentially the same as the Japanese version and has very luxurious features. Wood trim is used on the dashboard and there will be the option of leather upholstery (although a leather-wrapped steering wheel will be standard). For a high-tech look, there will also be some areas of chrome trim, like what is found in the latest Sentra. A unique feature will be the Tri-Colour Optitron meters which give drivers a chance to choose between amber, white or blue colours for meter illumination. The Optitron meters, which first appeared in the Lexus saloons, have a 3-D look and are noted for their clarity.

While it is known that a number of other companies are planning new model launches during the third quarter of 2001, the new Toyota Corolla is clearly going to be one that is eagerly awaited by the Malaysian public.

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As part of its program of introducing the all-new V70 Cross Country (XC) model, Volvo Car Malaysia is having a special weekend activity entitled the ‘Volvo XCapade’ at a private piece of property in Sg Buloh, Selangor. At the huge property, known as Tanamera, invited guests and their families can enjoy fishing, horse-riding, archery and radio-control planes, among other fun things as well as drive the new V70XC through a specially prepared off-road course. The course is designed to show the car’s capabilities, and includes getting through a deep mudhole which people who buy the RM260,000 All-Wheel Drive Volvo may never actually do.

At the venue, guests also get to enjoy free food and drinks and there’s lots of entertainment especially for the young ones from 9:30 am to 6:00 pm on four weekends in May and two weekends in June (2nd and 3rd).

Confirming that the event is costing quite a fair sum of money but not disclosing the actual amount, Volvo Car Malaysia Marketing Director Pang Cheong Yan said that it is an important investment to establish this new type of Volvo among Malaysians.

“It is a costly exercise but we feel it is an investment as this is a new type of product we are going to sell and we want people to appreciate the concept and the sort of environment it can be used in,” he explained to AUTOWORLD.COM.MY. He revealed that direct mail invitations had been sent out to 5,000 Volvo owners as well as another 20,000 potential customers. He added that there are also special invitations to customers in other towns to attend the XCapade.

According to a sales representative from Federal Auto Cars, the XCapade has been very helpful in promoting the car not only to existing Volvo owners but also to new ones. “I have already signed up two new customers; one has been driving a Toyota Harrier and the other, a Prado Turbodiesel,” he said happily.

If you did not get an invitation, it doesn’t mean you can’t go to the XCapade. You can contact a Volvo showroom to get a ‘passport number’ and register yourself or log into the company’s Malaysian website to do the same registration.

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Deborah Aronson has been named the Managing Director for Ford Malaysia Sdn Bhd, effective June 1st, 2001. Ms Aronson succeeds Richard L. Canny, who takes on a new assignment as the President of Ford Argentina. Mr Canny spent the past four years in Malaysia and was the first Ford-appointed executive to manage the company’s operations here since the mid-1980s.

“We want to thank Richard Canny for his outstanding contribution to Ford Malaysia,” said Gerald Kania, President of Ford ASEAN Operations. “Richard successfully navigated the business and his team through the late-Nineties’ regional economic crisis and started the brand transformation process in Malaysia. Today Ford is the third leading non-national automotive brand in Malaysia, from a sixth position four years ago.”

“We are delighted that Deborah will continue to work in the region, having done a wonderful job for us in Vietnam,” Mr Kania added. “Given her experience of working in Asia and her background, we are confident Deborah will continue the brand momentum we have in Malaysia.”

Prior to this post, Ms Aronson was the General Director of Ford Vietnam, a position she held since April 1999. She joined Ford Motor Company in 1985 and, over the years, has held various positions in Sales and Marketing, Product Planning, Brand Development, Customer Service and Dealer Development/Market Representation in both United States and international operations including Australia, Ecuador, Chile, Venezuela, Mexico, Middle East, Japan and Taiwan.

She has a BA in Social Work from San Diego State University and a MBA in Marketing and Management from the University of San Francisco.

With Ms Aronson’s appointment, Ford now has two women in the topmost positions in its Malaysian units. The other is Lena Olving, who is Managing Director of Volvo Car Malaysia, a subsidiary of Volvo Car Corporation. Volvo is part of Ford’s Premier Automotive Group that includes Land Rover, Aston Martin and Jaguar.

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In 1996, it would have been inconceivable that Ford could beat Honda in total sales in Malaysia and double its share of the non-national segment. Yet, last year, that happened and it was clear evidence of how Ford’s marketing strategies and even its image have changed significantly in just four years. The man responsible for that impressive achievement was Richard L. Canny who was Managing Director of Ford Malaysia (formerly known as AMIM Holdings. He was assigned to Malaysia to help Ford regain its market share and be on a solid footing in preparation for AFTA.

In all the time he was here, Mr Canny remained very accessible to the press and was keen to listen to our views, paying particular attention to the negative ones and addressing them. He also made it a point to personally participate in the forums of some websites, AW included, to get feedback directly from owners and understand what problems they faced. He was the only MD of a car company here willing to reach out to customers in such a manner.

Though very busy preparing for his new assignment as President of Ford Argentina, Mr Canny very kindly set aside some time to be interviewed by AW’s Chips Yap. The following are excerpts from the interview:

What were the challenges you faced on arrival in Malaysia and which needed ‘fixing’?
When I came to Malaysia in March 1997, there were a number of areas I had to quickly review and improve upon. Naturally, one of the first things I did was to find out why our market share had declined during the early 1990s.

It was clear that the products were fairly dated and although the pricing then was okay, there seemed to be inconsistencies. So overhauling and refreshing the range was important but that needed a while to achieve. In the meantime, we needed to get more promotions and increase advertising to improve Ford’s image.

The retail network was not in a good condition then and that needed addressing, along with getting better standards of customer care and after-sales services.

Why had Ford’s market share declined?
The issues I mentioned were the main reasons for the decline in market share but it was also important to understand why they were allowed to occur. It’s fair to say that Malaysia did not get a lot of attention from Ford then and it’s partly because there was the National Car program, so the market and volumes for Ford were not really big. There was also the equity Ford held in the joint-venture then, which was fairly small.

The business model for Malaysia today differs from 5 years ago. Can you explain why there was this change?
The distributor-dealer model has been a typical model for smaller markets but each market has its own unique characteristics and not all may be best served by Ford’s traditional business model of having a distributor-dealer arrangement.

If you look at Malaysia and the long-term opportunities and the need to actively manage the product planning side of the business – what products are built, the way they’re marketed, the assembly side and that it is done efficiently – then it is much more appropriate for Ford to have a more active role. So we decided that we should become more involved in managing the product, the brand, the retail network, the manufacturing side… in other words, a more ‘hands-on’ approach. Of course, we also have a joint-venture partner – Sime Darby – who participates with us as well. [Last year, Ford raised its equity to 49% in the joint-venture company called ‘AMIM Holdings’ Sdn Bhd, and it was renamed ‘Ford Malaysia Sdn Bhd’]

Anywhere that we have local assembly makes our product planning decisions and technical support from Ford more intense; obviously Malaysia is such a case. As we move towards regionalisation of the business under AFTA, the complementation among the countries requires a more active Ford presence which would not be possible with the distributor-dealer set-up.

Of course, as I said earlier, it also depends on the country’s potential; the greater that potential and opportunities in the long-term, the more inclined Ford would be to increase its active role and presence. So for Malaysia, as we were wanting to put in more effort, we also wanted a share of the rewards of that greater effort and we therefore felt that increasing our equity to 49% was the way to do that.

I also explained before how, when Ford did not have a significant equity in the joint-venture, it was not ‘noticed’ back in Detroit [where Ford’s World headquarters is located]. But now that we have 49%, it appears in annual regional reviews more prominently and that means that attention will be given to the operations here and out of this interest will come more technology transfer, faster model introductions and access to more resources in the Ford world.

What about the change of name from ‘AMIM Holdings’ to ‘Ford Malaysia’?
The name change reflects the increase of Ford Motor Company’s shareholding – from 30% to 49% – in its joint-venture. We regard this country as an important market for Ford and re-establishing our corporate presence here for the Malaysian consumers will assist us in building our brand and preparing for the implementation of AFTA. You could also say that the name change reflects Ford’s confidence in the excellent prospects of the Malaysian economy as well as the growth potential of the automobile industry in Malaysia.

How dominant is Ford’s management in the Malaysian operation?
It should be clear that the operation here is a joint-venture and we have a board of directors with representatives appointed from Ford and Sime Darby. We operate on a consensus basis with our partner and major decisions need to be discussed by the board and both parties have to be agreeable. Operationally, on a day-to-day basis, it comes down to the actual people involved and at the moment, there are four people from Ford – out of roughly a thousand employees in Ford Malaysia – so it is a very small percentage of employees that are placed in Malaysia by Ford. Of course, we do get a lot of personnel coming and going too but it’s just four people actually sitting here on a full-time basis. These people have the roles of Managing Director,Business Development/Finance, Manufacturing and Human Resources. Additionally, Ford also has some support people within the manufacturing and HR areas.

I don’t think that the number of people assigned to Malaysia by Ford will change significantly over time and it is in fact our vision that the business here in Malaysia should be staffed by Malaysians. That’s why we are exposing our Malaysian staff to Ford’s operations elsewhere so they gain the experience. Steven Tan, who was Ford Malaysia’s Marketing Manager, is now Communications Manager for the ASEAN market and based in Bangkok while Pauline Kee, another Malaysian who joined us not so long ago, is Communications Manager for other markets in the Asia-Pacific region. It’s unfortunate that Ford had not been as technically and actively involved in Malaysia for a long time so the fresh knowledge of Ford’s processes has been lacking but we’re addressing that now.

How useful is having experience in the ‘Ford world’ by working in other Ford units?
I think it is important that we have people who have experience working in Ford so that they have better access to the Ford network. That’s why we want to develop our Malaysian staff and give them the broader overseas experience so they understand how the company does business in other markets.

Would product pricing be better since Ford is actively involved?
There is still the negotiation of prices with the factory and as this is a joint-venture, it is the responsibility of the MD to make sure that the joint-venture achieves a satisfactory return on investment. Obviously to do that, we need to bring models to the market at the right price and have a cost level with an acceptable margin. Of course, there may be times when we make a request for changes in pricing but we try our best to be competitive and make a decent profit and at the same time satisfy customers.

What about including CBU (imported models) products in the line-up
It’s important to have an image product in the line-up and I think the Focus has been doing a great job. I feel that apart from, say, five or six locally assembled models, it would be good to also be able to offer two or three others CBU products. Although Malaysia’s import taxes are among the highest in the world – 140% to 300% – there are some opportunities for us to sell CBUs in specialised segments. However, government policies at this time don’t allow us to adopt such a strategy in a significant way.

What’s the status of the plan to use Malaysia as the ASEAN base for the Escape
We announced that intention last year but with Malaysia’s delay in opening its auto sector under AFTA till 2005, Malaysian-assembled vehicles will not be accepted in other ASEAN markets at the preferential tariffs of 0 – 5%. It wouldn’t be fair to our distributors in the other markets if they have to wait till 2005 and they don’t want to. So we are looking at an alternative site elsewhere in the region [to allow us to enjoy the benefits of AFTA from 2003].

It’s a pity, really, because we would certainly have assembled much higher volumes of the Escape and this would have meant more business for Malaysian suppliers. And Ford would have made a bigger investments and perhaps added another model or two.

In your view, what’s the quality of Ford vehicles assembled in Malaysia?
The quality of vehicles we assemble here have to meet Ford’s global standards and what Malaysian customers get are, I believe, very good and very high quality products. We are active in working with our suppliers to bring them up to global standards in terms of costs and delivery capabilities as soon as possible. It’s well known that the competitiveness of our suppliers here doesn’t match those in Thailand. We also have a small group of engineers here to assist them to meet the QS9000 standard which is an industry-wide standard.

Assembling good vehicles requires a lot of dedication, a lot of loyalty and a well motivated and well trained workforce. Our people in the plant are great and we have excellent labour relations. The workforce is very receptive to change and I see nothing that prevents Malaysians from building global-standard high-quality vehicles.

Looking back after four years, what has been achieved
In early 1997, just before I arrived, Ford’s share in the non-national segment was around 4.6% and today, we’ve gotten up to a little past 10%. The actual volumes have been up and down during that period – you have to remember there was the recession – and we have only just now recovered to pre-recession levels. We were doing about 7,800 units a year in early 1997 and then it dipped with the recession but this year, we hope to get up to 8,000 or 9,000 units.

What is significant, though, is that the share of the non-national makes in the total industry volume has declined from what used to be a third, to a fifth today. As I have mentioned before in our presentations during new model previews, the passenger car segment in particular has shrunk tremendously since 1997 for non-national makes and there is actually no business case to assemble passenger cars as far as Ford is concerned. Bear in mind, though, that Malaysia has the largest passenger car volume in ASEAN but it’s greatly dominated by the national makes these days. We are still assembling the Lynx S and LS to maintain a presence but as you already know, we have discontinued the Telstar and our representative in the 2-litre segment will be the Escape SUV.

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TD Cars (M) Sdn Bhd today passed a milestone with the completion of the 100th unit of the TD2000. The classically styled sportscar, with its resemblance to the MG TD of the 1950s, has been manufactured by Automotive Conversion Engineering Sdn Bhd (ACE) at the Glenmarie Industrial Estate in Selangor since late 1999. ACE is the EON unit which specialises in converting Protons into long-wheelbase limousines.

“By the global standards of the automotive industry, 100 units is just a few hours’ production but that applies to mass-produced models,” said Dato’ Dr Jaafar Ali, Chairman of TD Cars (M) Sdn Bhd, at the special ceremony today.
“The TD2000 is not a mass-produced model and is, in fact, hand-crafted just like the most exclusive limousines. Unlike the mass-produced, high-volume models which all look the same, the TD2000 can be individually customised to what our buyers want. Thus, it takes longer to make each unit and so 100 units after just over a year of operation is not unusual.”

The 100th TD2000, finished in metallic blue, was sold to Rotary Club for its fund-raising activities for charity. The symbolic key to the car was presented to the club president by Tan Sri Dato’ Seri Mohd Saleh bin Sulong, Chairman of EON Bhd. The EON Chairman also presented symbolic keys to another two units of TD2000 to the two winners of the ‘hole-in-one’ prizes at a recent golf tournament.

At the same event, held at the EON complex in Glenmarie estate, TD Cars (M) Sdn Bhd also signed a distributorship agreement with its first overseas importer, Cycle & Carriage Industries (1986) Pte Ltd in Singapore. According to a TD Cars official, the necessary approvals from the Singapore authorities have been obtained and the first 18 units will be shipped to the republic shortly.

“The Singapore market is just the first of many export markets we are looking at,” said Dato Dr Jaafar Ali. “Although we are already in advanced stages of negotiations with many overseas distributors who are keen to sell the TD2000, there are still issues of vehicle standards to be met in some places and this takes a bit of time. It is not that the TD2000 cannot meet the standards because it is already certified to meet the tough Australian Design Rules, but it is more a matter of going through the processes of application.”

He added that the company is planning to sell the TD2000 in many countries which use righthand drive vehicles and hopes to even export them to UK in the future.

According to Datuk Adzmi Abdul Wahab, Managing Director of EON, one unit of the TD2000 will soon be sent to the UK because a British customer who was in Malaysia for the F1 GP had seen it and made the purchase while he was here.

The TD2000 was originally conceived in Australia in the mid-1980s and TD Cars (M) Sdn Bhd, which was formed in 1999, acquired all the rights to the design and transferred manufacture to Malaysia. Although the fibreglass-bodies car uses a Toyota 3S-FE 2.0-litre engine supplied by Toyota Motor Corporation, 53% of its components are sourced locally.

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It seems almost certain that the new Volvo V70XC (XC: Cross-Country) will be officially launched soon, perhaps even this month. Some units have been seen in the vicinity of the Federal Auto showroom near MegaMall lately and it has also been reported in the AW Forum (Venue Volvo) that a fleet of V70XCs was seen with police escorts. There’s also been a promotional event at KLCC recently with the V70XC as a ‘star’.

The V70XC is not unknown to Malaysians as the Volvo stand at the KL International Motorshow last year had one unit on display. In the middle of last year, a Swede also drove it through Malaysia on his journey around the world.

Being a ‘V’ model, it is a stationwagon and bears an evolutionary look to the previous V70. The highlight of the new model is a 4-wheel drive system said to superior in performance; unlike most variable 4WD drivetrains which stop at a 50:50 split between axles, Volvo’s all-wheel drive system can deliver 100% power to the rear wheels. The V70XC also has a traction control system so it should prove quite a capable off-roader.

At this time, there are two engines – a 2.3-litre petrol unit with a light-pressure turbo and a turbodiesel. We think that Volvo Car Malaysia will concentrate only on the petrol engine because whatever impressive qualities the turbodiesel may have, Malaysian buyers still have a prejudice against these oil-burners.

AUTOWORLD.COM.MY’s Chips Yap had a brief drive in the V70XC last year while visiting Volvo’s parent company, Ford, in Detroit and found the car very impressive. Although its ride height is higher than for normal cars – to allow it to travel over rough terrain – the handling remained very stable. On-road performance was good with the petrol engine and changes were brisk and smooth with Volvo’s Geartronic system.

It’s hard to categorise this new Volvo. It certainly is not a Sport Utility Vehicle (SUV) like the Land Rover Discovery but to regard it as a mere stationwagon would also not be appropriate. It is one of those “cross-over vehicles” which are appearing in greater numbers these days, combining good on-road performance with moderate off-road capabilities for those who want to go camping or do other ‘lifestyle’ activities.

Anyway, we look forward to checking out the V70XC real soon so drop by regularly for the news.

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