Ford Figo - built in India, developed in Australia. And 2012 Ford Ranger

Many are aware the Ford's new developing market hatchback model - the Figo will be made in India. What is less publicised however is that while the car will be made in Ford's new regional centre of excellence manufacturing plant in Maraimalai Nagar, near Chennai, the Figo was actually designed in Australia.

Development work of the Figo was done by Ford’s Asia Pacific & Africa product development team in Broadmeadows, Australia, near the northern outskirts of Melbourne. The team is led by Scott Strong. Broadmeadows is the headquarters of Ford Australia while Ford's Asia Pacific & Africa product development's head office is located in Bangkok, Thailand.

The Figo is based on the Mk5 Europe's Ford Fiesta. This should not be confused with another Ford model sold in India, also under the name Fiesta. The Indian Fiesta is also rumoured to have received significant engineering input from Ford Australia.


The Indian market Fiesta is designed solely for the Indian market consumption and is not sold elsewhere. It's not a bad looking car, look closely and you can see hints of influence from large Aussie sedans like the Ford Falcon, which further lends credibility to the rumour of Aussie link.

Besides the Figo, Ford's Australian team is also working on the next generation Ford Ranger and it's sister car; Mazda BT-50 truck (internally known as T6). The T6 Ranger / BT-50 will also be sold in USA as a small-light pick-up truck, slotted below their gargantuan F-150 models that are proving harder to sell in the current environment of high energy prices. The T6 Ford Ranger is expected to be launched by 2012.



Spyshots from CarAdvice.

Pump Till The Last Drop

Got this via email. Readers who frequent the JB-Singapore border area should be familiar to sights like these. As fuel is a price controlled item in Malaysia, smuggling (fuel prices are floated on a free market in Singapore), smuggling is rampant and there will always be cheapskates, irrespective of what make of cars they drive who will try all sort of funny means to save a dollar or two.

By jacking up the car on side, more fuel can be "forced" to in to the fuel tank, filling the volume along the fuel filler neck, which would otherwise have spilled out. All fuel pumps at petrol stations have an auto-stop mechanism that will stop the fuel pump once the vehicle's fuel tank is full. Some drivers, like the one pictured above will jack the car up on its side, and proceed to slowly fill up the filler tank to the brim, pausing between each slow fills to allow the air pressure / bubbles inside be released. More extreme efforts will involve rocking the car from side to side (again to release air pressure in the fuel tank). At least 2 vehicle distributors in the country endorse such methods to be used to obtain their unrealistic, ultra-high fuel consumption figures in their brochures. For some unknown reason, the manufacturer might not be able to provide such figures specific to a local / regional model variant.

A certain amount of air space within the fuel tank is necessary as fuel expands and contracts in relation to their surrounding temperature. This is the reason why a warning against overfilling is stated in every car owner's manual. Without having sufficient expansion space, fuel may leak into the evaporative emission control system, whose main component is a charcoal canister to trap fuel vapour from evaporating to the atmosphere. The canister is not designed to deal with unusually large amounts of vapour or even liquid fuel.

If you really want to get more mileage out of every drop of fuel, stick to the more practical (and larger gains) efforts. In their general order of importance / practicality.
1. Check your tire pressure. It is OK to pump it a tad higher than the manufacturer's recommendation.
2. Drive as smooth as possible with minimal braking and hard acceleration. Anticipate slowing traffic and merging traffic.
3. Swith off your engine if you know the car is going to be idle for more than a few minutes. But be careful, repeated start-ups between short distance drives drains the battery.
4. Remove those roof racks if you are not going to use them.
5. Drive without air-conditioner. Aerodynamic drag with the windows down is quite minimal if your doing below 70km/h or 80km/h. Which is the average speed for a rush hour morning / evening traffic anyway.

1Malaysia Formula 1 Team

If you are still clueless about what is going on.
Malaysia’s own F1 team
The cost of 1 Malaysia’s F1 bet
Malaysian F1 team plans grand HQ

Enough has been said on the blogosphere and Internet forums (90% of them are rubbish comments but 10% are worth your time). The cynic in me was just wondering wow this is a great plan for the government to divert the heat of public's attention away from the multitude of issues that is messing up this country at the moment - MACC, Seksyen 15 cow head protest, Teoh Beng Hock, BN's fledgling support etc etc. Sports have always been used as a popular tool for political control since the days of ancient Greece. Politicians like to use major sports events to drum up support as well as diverting the people's attention from more pressing issues i.e. employment, poverty, literacy rate, etc etc.

In the days of the Cold War, Commie states of Russia, China and East Germany were always keen to use athletics to drive the message of the superiority of their nation against the bourgeois people of Western nations like United States of America. Even Hitler pushed for Germany's increased involvement in motorsports to prove a point about the superiority of the Aryan race. Those Auto Union racers, silver arrow Mercedes-Benzs and even Germany's famed autobahn highways have their progress traced back directly to Hitler's involvement. Of course, motor racing and the autobahn have existed in Germany long before Hitler assumed power - but he was a strong guiding force pushing for their greater advancement so he could use them as a political tool.


But of course, I would be far too flattering to compare the sophistication of BN leaders to the likes of Mao and Nikita Khrushchev.

Anyway on top of the obvious that many have already said, there is one bit that I think many are missing - the team's eventual HQ location in Sepang. Anyone who has been following F1 seriously will know that all the major F1 teams, irrespective of their nationality (I know there is no such thing as nationality of an F1 team these days but for comparison sake lets assume the good old Ferrari=Italian, McLaren=British), are all based in the UK. Britain's auto industry manufacturing might have died a long time ago, but some parts of the industry are far from dead - they have just moved up the value chain. Even the Japanese and Germans recognise Britain's unique talent in motor racing and until today Britain is recognised as the world's centre of F1. All the best engineering brains, craftsmen, parts fabricators, mechanics, team managers are in Britain. Formula One is about money, technology and also efficient logistics. It is a myth that F1 is just about the team. The reality is that many parts of an F1 car are custom built and machined by numerous small expert machinist and fabricator services companies that are located around Britain, usually within the same area of many of the leading F1 team's HQ, i.e. Woking, Oxfordshire. They usually have many decades of experience and many of them have fathers who used to work there a generation before. These expert talents are able to produce parts with even greater tolerance than a computer controlled machine. These kind of "soft elements" cannot be replicated anywhere else overnight. Nationalistic pride was never and should never be part of any decision regarding Formula One. Team HQs are mostly based in UK due to the simple fact that the most brilliant team managers, race engineers and technicians are found in the UK. Even Japanese car companies recognise this fact and chose to run their F1 operations out of Europe.

You can't just expect to relocate an F1 team's headquarters to obscure South East Asian country whose local mechanics' most marketable skill is fitting dustbin size exhaust mufflers on horrible looking Protons and tiny Peroduas and creating cheap imitation fibre glass body kits, and then expect to produce results by virtue of some billion dollar investment into fancy equipment and technology. A F1 car will go through many different design changes throughout the season, especially the aero bits, exhaust and suspension. After each race engineers will review telemetry data collected and constantly fine tune the individual bits to shave off a milisecond here and another milisecond there off the lap time. Sometimes the deadline is so tight that engineers work round the clock and have the final part flown to the actual race location via express courier services, on the actual race day. DHL and FedEx's involvement in F1 is not just mere sponsorship, they actually fly out real F1 car parts from the factory to the race track!

Watch the video below to understand what is required of an F1 HQ.


Now think about it - where are these people who do these high-end jobs going to come from? This has nothing to do about inferiority complex, it's about leveraging on your own comparative advantage and realise what you can't / not ready to do yet. How about doing the basic boring bits like designing cars that people want to buy and will last 500,000km before we start talking about these space-age stuff?

Who are we kidding to think that we can produce winning cars out of some obscure country in South East Asia? The government likes to compare the efforts of Force India. But even Force India operates out of Northamsphire. Japan's Honda F1 (before Ross Brawn purchased it) used to operate out of Leafield and Northamptonshire. Toyota F1 too was not based in Japan but in Cologne, Germany. In fact one of the explanation by F1 analysts regarding the poor performance of Toyota F1 is due to its location in Germany, which is further away from the expert contractors in UK.

Like all this regarding the development of this country - there is just no clear direction. We already have a team racing in A1 GP. What's the objective of this new effort? To promote Lotus and Proton? Which respectable car industry executive actually believe in the old adage of race on Sunday sell on Monday anymore? It's rubbish in this time and age. Toyota, Honda and BMW killed their F1 programmes amidst falling vehicle sales and rising cost of F1 involvement. I highly doubt you can quantify if this has affected their brand any single bit. Porsche is no longer involved in any international level motorsport events as a works team (it's last appearance as a works team was with the 1999 year 911 GT1 Le Mans car), other than a regional GT3 Cup one-make series. Ferrari is still in F1 due to historical reasons. Has Porsche suffered any bit due to the lack of motorsports involvement? Not a single bit.


Hyundai-Kia is one of the fastest rising brand at the moment, and they have almost zero involvement in top-end motor racing. They are not even involved in WRC anymore. Take a simple lesson from the Koreans - they raised their brand profile by keeping in touch with their customers but not in a way that has anything to do with their vehicle's performance (which is nothing great); they sponsored World Cup! It's a lot cheaper than F1 and makes a lot more sense. Best of all, you won't embarrass yourself no matter which team win or lose. What good does being involved in F1 do if you are going to be last of the pack everytime, which 1Malaysia team surely will. I have the highest respect for the Lotus boys at Norfolk. But they have not raced in F1 for decades and I don't think they did any consultancy for F1 projects throughout those in between years. Toyota, with its mega budget (largest on the grid) failed to produce any significant results and made itself a target of jokes and further reinforced the negative perception that Toyota are rubbish at racing and sports cars. Is some misguided "Malaysia Boleh" mantra going to be used to coax the people into believing Lotus or Proton can manage a racing team better than Toyota? Killing the Toyota F1 team is not a difficult decision. It was one of the first few things Akio Toyoda did when he came on-board.

Toyota thought that armed with its mega budget and its often touted "Toyota Way," Kaizen philosophies and applying elements of its Toyota Production System into F1 it could succeed. How wrong they were. Toyota learned the hard way that throwing money in F1 does not necessarily bring results, though you still need mega budget to deliver results. What works on a mass production car plant does not necessarily work in F1. The top teams are where they are today because of their decades of experience, the quality of their people and their passion. They are run by people who eat, drink and sleep F1. Hiring Mike Gascoyne alone will not make much of a difference if he can't put together a winning team. By the way, Force India was not created overnight. Kingfisher airline's boss Vijay Mallya bought over the former (shortlived) Spyker F1 team, which was previously known as Midlands F1, and before that Jordan F1, whose history can be traced back to the 1980s. It was simply a rebranding exercise and the people who worked there are highly experienced in F1.


And we are to expect a Lotus led effort will raise the profile of Malaysia and Proton? Of course everyone in the cabinet knows the answer. But remember my earlier paragraph - sports as a political tool....

World's Largest Racing Circuit - Gotland Ring

Currently, the title to the world's longest circuit goes to Germany's Nürburgring, referred to by some as the "Green Hell" (name given by Sir Jackie Stewart) or "The Ring." A Finnish man by the name of Alec Arho Havren has laid out his ambition to built the world's largest racing circuit in Gotland, Sweden by 2013, aptly named Gotland Ring. Mr. Havren has bought a large piece of land measuring approximately 6km square of what used to be an old limestone mine.

When completed, the circuit will measure a total distance of 28km, split into 6 sections capable of hosting simultaneous events. At the moment, the first section of the circuit, measuring 3.2km in the Northern Loop has been completed. A 4.2km Southern loop is expected to be completed by 2010 and together with the Northern loop, this layout is expected to form the "Grand Prix" profile that will be used by Formula One, which is expected to race here in the near future. Of course, we will have to wait for 2010 race calendar to be released before confirming if the Gotland Ring will be hosting the first Swedish Grand Prix since 1978. The entire circuit, complete with a family theme park and hotel is expected to be completed by 2015.


Due to the high cost of providing FIA approved barriers and fencing as well as TV coverage, it is not likely that GP races will cover the entire 28km of the circuit. In the same way Formula One cars no longer race the entire 21km of the Nurburgring. Endurance race events like the 24Hours of Nurburgring are more likely to use the longer stretches. But in the case of the Nurburgring "Northern Loop" Nordschleife, part of the reason is also because the Nordschleife has been deemed too dangerous for F1 after Nikki Lauda's massive fiery crash in '76 and the long length meant that it takes very long for rescue vehicles (pre-Mercedes safety car era) to reach the site of any accident.

As a reflection of the current state of political correctness in Europe, Gotland Ring is almost entirely powered by electricity generated from numerous giant wind turbines that can be seen along the circuit.

The circuit designer and owner Alec Arho Havren is an avid racer himself, said to have won a third of his races, including one in Nurburgring Nordschleife. That said, Gotland will never replace the magic of Nurburgring Nordschleife. Petrolheads who grow up in this generation will forever remember the Nissan GT-R vs Porsche 911 spat that took place there. On a more technical note, the Nordschleife has a combination of road that is not dissimilar to countryside B-roads. The combination of cambers, hill sections, crests, bumps and fast flowing corners provide an excellent workout for a car's chassis. If the car handles well here, it will handle well anywhere in the world. No wonder all the main high performance car divisions of major automakers have their bases next to the circuit. These test vehicles used are usually given "industrial pool" pass access. Gotland Ring just seemed too perfect, too clinical and is more suitable for high end motorsports like Formula One rather than vehicle dynamics validation as well as racing, functions which are currently served by the Nurburgring.

Nurburgring Nordschleife - one of the most beautiful circuits in the world.

Gotland is a small Swedish island near the Baltic sea. The capital is picturesque medieval city of Visby, with no less than 29 castles - complete with towers, high walls and moats. I am not a console game geek but I understand that the Gotland Ring is included in the latest GranTurismo 5 on Sony Playstation.

US-China Tire Trade War Will Hurt US In The Long Term

When President Obama was elected into office, the world was cheering him on. Singing all sort of praises from being a new face of equality and renewed hopes of better ties between US and the rest of the world. An acquaintance, an extremely brilliant chap whom I highly respect and one time adviser the Singaporean government on matters pertaining to military defence and foreign policy (he has since moved on to a less military focused role to public policy and telco technology) told me that he had his reservations against Obama. Of course, saying that you do not share the world's optimism amidst a wave of Obama-mania will not win you many friends so he only shared his inner thoughts with only a few. This chap reasoned that Obama's background and leadership style suggests that he is more likely to favour protectionist policies. And that Americans in general, the "Joe Plumber" type, will continue to support him in the short term because of his promises to protect jobs from foreign competition. The rest of the world meanwhile, will be at the losing end (i.e. Singapore, whose government he consulted for) because trade with USA - which is still the largest trading partner for many countries will be reduced. America will see a temporary spurt of growth, due to the many "socialist" left-wing leaning policies that promotes domestic industries and distribution of wealth. But we live in an age where political boundaries and the concept of nation states are slowly losing their significance. The economic reality of today is that you can't close your border to trade and not hurt your own people in the longer term. Therein lies the problem, Americans will suffer in the longer term though they will see a temporary period of short-lived growth while the rest of the world will not be any better off due to reduced trade. As such, the economic recovery will be a very slow and difficult process. I have to admit at that time I don't know what to think of his comments.


His words and predictions slowly began to ring true when early this week, President Obama signed an edict to impose new duties of 35% on Chinese made tires imported to USA. The new tariff will take effect Sept. 26 and add to an existing 4 percent duty. President Obama argued that the move will save American jobs from being lost to cheap imports being "dumped" in America. But that is a seriously flawed argument - it not any better from Bush Jr.'s flawed argument of hunting for WMDs in Iraq.

Don't the Obama administration realise that a large majority of Chinese made tires are actually produced by Western tire companies, a large number of them American? American tire company Cooper Tires have even publicly criticised the move. It is not just tire makers who are concerned. Leading companies from other industries are closely watching the recent trade spat as there is no reason why the protectionist policies will not be expanded to include other industries. Bloomberg news reported that multinational companies such as Caterpillar Inc., Citigroup Inc. and Microsoft Corp. have urged Obama to refrain from curbing imports, saying it could lead to a “downward protectionist spiral.”

The only group who supported Obama's move is United Steelworkers union, and they are not too different from UAW (United AutoWorkers Union). United Steelworkers argued that cheap imports cost 5000 American jobs. But, you wouldn't take economic lessons from factory workers won't you? The 5000 American jobs lost are not directly due to cheap imports, but are due to the simple fact that cost pressures and a generally depressed income levels (due to the current economic recession) is causing the market the increasingly shift towards cheap budget tires. China is a low cost manufacturing base and naturally American car makers would want to take advantage of that to meet the demands of the market. The 5000 American jobs are lost because American domestic tire industry is unable to find a way to meet the market demands, they are producing tires that not many wants to buy. Now that US slaps higher tariff on Chinese made tires, what is stopping companies from importing cheap tires from other low cost bases like Eastern Europe, South America and ASEAN grouping countries? Thailand, Indonesia and India are major tire producing and exporting countries. Is Obama going to implement a blanket ban on all imported tires then?

The new tariff will only hurt even more American jobs in the longer term. Without lower cost resource, American businesses in the downstream will be hurt. A simple example would be transport companies will operate at a higher cost and this will affect everything from Wal-Mart products and UPS parcels and even American car manufacturing (not just the domestic Big 3 but foreign makes like Toyota who makes cars in US as well). Just think of the domino effect starting from Wal-Mart and the already battered US auto industry.

Wall Street Journal reports that Chinese tire imports account for only 11 percent of the overall tire market in USA. With recent price hike in Chinese made tires, somebody will have to move in to fill this eventual "void" left by these 11 percent of Chinese made tires. Beneficiaries will include Thailand, Indonesia and India. All main tire makers including Goodyear and Bridgestone (Firestone) have significant R&D and production facilities there. But it will not be a simple affair as just sending another shipment of tires to America instead of to another country. Tires are tailored to each individual export destination country as no two countries have the same road, weather and driving condition. Tire compounds and thread pattern have to be developed specific for each region / country. It will take sometime before anyone can move in to fill the gap left.

The irony is that it is the very same US of A, via its immense influence wielded in the WTO, that is urging developing markets to liberalise all the markets, everything from mineral mining, energy, finance and banking, automotive, phamaceuticals, etc etc.

Invest in your mind. Go read this book.

Re: Stuck with dirty diesel

The following is a response to an article "Stuck with dirty diesel," published by The Star.

The article is lacking in proper research and ignored many obvious reasons behind the non-availability of Euro 4 emission standard compliant diesel locally.

So, if we look at it from world standards, there is actually not much to shout about in terms of the introduction of the two Euro 2M standard fuels.

To make matters even worse, we are at least two generations behind immediate neighbours Singapore and Thailand where Euro 4 diesel is widely available.

Fact : Euro 4 diesel is not widely available in Thailand, at least not officially as fuel companies don't publicly announce the emission standard of their fuel other than it complies with the government regulation, which at the moment for Thailand is still EU3, sometimes known as Step-3. Step-4 or EU4 diesel will only be legislated by 2012 and at the moment, major refinery facilities in Thailand are gradually being upgraded to produce EU4 compliant high speed diesel fuels.

EU4 diesel is easily available in Singapore, since 2006. Singapore is one of the largest oil refinery and distribution centre in the world. Surprisingly, ExxonMobil's largest refinery facility in the world is not in US or Middle East but in Jurong, Singapore. As such, Singapore's oil refinery facilities would need to comply with the latest standards and adoption of Euro 4 diesel in Singapore makes a lot of obvious logistical and economic benefit. When you think about it further, is rather surprising considering Singapore does not have any oil resources but it is still a major exporter of processed petroleum products back to other oil producing South East Asian countries including Thailand and Malaysia (both of whom are have abundant oil resources) as well as Ocenia region Australia and New Zealand. Talk about selling ice to eskimos!

Each of those countries mentioned have their own domestic refinery facilities, but it's a question about capacity and also technical expertise. I don't have the figure for Thailand and Malaysia but Australia imports 40% of its diesel fuel from Singapore. The Aussie government is quite transparent and it is very easy to dig up stats and figure from Australian government ministries.

But fuel adoption policies for countries like Singapore and Hong Kong, due to overly metropolitian nature is not a good comparison for large developing markets like Malaysia. Thailand and to a certain extent India is a much better example. Diesel fuel is not used just used for cars, but farming, and other industrial machineries. These have to be taken into account when considering a country's overall fossil fuel energy consumption.

Many may be surprised that Singapore, a tiny country with almost no natural resources of its own, let alone oil wells is a major exporter of processed petrochemical products. History has shown that a country blessed with abundant natural resources is more likely to sit back, be complacent and do the minimal to extract wealth from the ground - which is just to simply approve / partner with foreign oil companies to do oil exploration. Worse, their politicians will squabble over control of oil wealth. Singaporeans on the other hand, had nothing for them to fight over but instead had to worked a lot harder to remain relevant since. They invested in hi-tech oil processing facilities, attracted the most brilliant engineering minds, made its sea ports hyper efficient to export processed petroleum products.

A ship captain once told me that he could dock in Port of Singapore, do the necessary clearance to unload the goods, have them loaded to lorries, drive across the Causeway with time to spare while an equivalent ship in the same circumstances that is docked in Port Klang will still be waiting there. Discovery Channel did a documentary on the workings of Singapore sea ports, said to be among the busiest in the world.

Anyway back to diesel talk.
Asked why Petronas was not introducing Euro 4 diesel, he replied: “The Government does not allow us to do so.

“We are ready to do so and were about to convert our refineries to produce Euro 4 diesel four years ago when the Government changed its mind.”

The government here practises fuel subsidy and price control. Clean diesel require a lot more complex refining processes and the most obvious impact from this is cost. So who is going to pay for the difference? Oil companies? One can't accept statements from Petronas staffs as the universal truth. Petronas is pushing the difficult decision back to the government as it is not willing to invest in EU4 out of its own pocket. It cannot be a reason as simple as "the government does not allow" EU4 to be implemented. Didn't anybody asked why? With Petronas being the government's cash cow, I am sure decisions such as these were made in the interest of Petronas more than any other company. The underlying reason is that the government is not willing to subsidize EU4 diesel any further and neither is Petronas willing to invest in upgrading its facilities using its own money. What would you expect from a government linked company that is so used to having the governemnt negotiating in their interest and protecting them and has never been subjected to an independent external audit?

It seems that while Petronas was willing to forgo some profits to sell high quality diesel – they make a premium of RM2 per litre exporting Euro 4 – the foreign oil giants are not willing to do so. It will cost about US$30mil (RM105mil) to convert a refinery to produce Euro 4.

There is a world of difference between converting a refinery to produce EU4 diesel and forgoing some profits. The former involves capital expenditure and facility downtime while the other is simply reduced earning margins. How can one lump the two together and make a conclusion that Petronas is willing to introduce EU4 voluntarily just because somebody said they are willing to forgo some profits? Converting a refinery is a very complex task, generally guided in the oil and gas industry with something called a Nelson complexity index. It is not as simple as "we are willing to forgo some profits though others are not willing."

I accept that it may cost the Government more in subsidy to bring in Euro 4 diesel and just as there are two grades of petrol petrol, why not similarly for diesel?

Euro 4 diesel can be sold in the country as premium diesel just like RON97 petrol. Why not?

As it is right now, companies like Shell which now offer 3 grades of petrol (regular 95, regular 97, premium V-Power) have outlets that are having a difficult time managing the pumps. How are these outlets going to manage 2 grades of diesel? Different grades of fuel need to be stored in different underground storage tank.

Like many businesses, retail outlet ownership is split between principal owned branches (company owned) and dealer owned outlets. The larger and newer principal owned outlets might have no problem adapting. But what about the smaller dealer owned outlets, run by the neighbourhood chinaman or Pak Abu in Gua Musang? Who will finance the renovation and facilities upgrade to store two grades of diesel? Does this mean that that EU4 diesel will only be available in certain locations?

And let's not forget about logistics of transporting the many different grades of fuel, all while keeping in mind that this is in a price controlled market. Contrary to common perception, oil companies actually make very little profit in the actual act of retailing fuel, even less in a market like Malaysia where prices are fixed and the only way to differentiate oneself is via branding. The ones who make the most money are the middle men energy traders selling crude oil contracts. Oil companies compensate their earnings from, amongst others - selling refined crude to other oil companies, premium products, non-fuel lubricant products for industrial use.

Keep in mind that I am not making a blanket statement that multi-grade diesels are not viable. In Thailand, Shell even sells V-Power diesel along with regular diesel. I can't even keep up with the many different grades of fuel sold there - multi grade ULG, gasohol, E5, E10, E20, B5 biodiesel and the assorted CNG and LPG etc etc. The point is that Thailand had a National Energy Policy in place since 1991 and the recommendations were made known to energy companies for their future investment planning very early on. We on the other hand, have not even started talking about having a national energy policy.

Also, the author makes a lot of references to EU4 diesel in Thailand and Singapore. The Thais pay an equivalent RM2.60 per litre of diesel, while Singaporeans pay an equivalent RM3.10 per litre (depending on global prices as fuel prices in these countries are floated on a free market). The last time petrol price went up to RM2.70 per litre, the people went hopping mad, after many decades of being insulated from world prices and molly cuddled by government subsidies. Does anyone really think the people will be willing to pay for EU4 diesel?

Of course this is an overly simplistic comparison as in economic terms, cross border price comparisons need to be adjusted to the purchasing power parity (PPP) factor of the local economy. In lay man terms - it's what's the price of Big Mac in Malaysia vs Thailand vs Singapore. But in any case, EU4 diesel prices will be A LOT higher than that RM 1.70 per litre in Malaysia. You can't have things both ways - first world quality and third world prices. Of course the bigger issue is also about wages, why are our local people's wages being pressed down so low relative to other countries?

Probe further, you eventually come to the realisation that the root cause of the problem is the government subsidy and price control, something I am personally against. There has been very little evidence that any form of subsidy is ever effective in bringing the desired result. Subsidy promotes wastage, complacency and removes whatever little incentive there is to adopt newer energy efficient friendly technologies (i.e. hybrids, EVs, CNG, etc etc) and prudent resource / wealth management. Look at Venezuela, Saudi Arabia, Iran, Kuwai, Russia. All major oil producing nations and their people pay very little for fuel. But all of them are constantly at the bottom half of UN Human Development Index.


Europe imposes very high taxes on transport fuel, and the tax earnings is used to built and maintain efficient public transport network. Norway is a good example of prudent resource management. Norway is the world's third largest oil exporter (after Saudi Arabia and Russia), but Norway does not squander its oil wealth into giving subsidy to its people. All Norwegian oil profits are reinvested into improving social welfare and education. Norwegians pay market prices for their fuel but they have some of the best education system among OECD nations, better than USA and Western Europe. In 2007 Norway was 2nd in the UN Human Development Index, after Ireland. The Norwegian government created a Norwegian Government Petroleum Fund to invest its oil profits. As of December 2007, the fund is estimated to be in excess of USD 388 billion. The fund is created to finance future government projects and development once petroleum reserves are exhausted. The Norwegian government is also aggressively pushing for a policy to ensure oil production in Norway remains viable for another 50 years by gradually reducing oil production. I can't confirm this but I understand that in many Scandinavian states including Norway, the government provides welfare aid to the unemployed under the condition that they must not have any criminal record. So if you are poor and out of job, go to the government and plead your case, don't go rob an old grandmother. This effectively removes a major motivation in crime. But if you have a single criminal record, you will be barred from the welfare system for life.

Why talk about spoon feeding the people with subsidy on a daily basis? Time and time again, independent studies have proven that the only socio-economic affirmative action that works are those that are focused on education, not any ethnic / racial based assistance or subsidy in any form.

If anybody wants clean EU4 compliant diesels, remove the subsidy AND clean up the government and everything else will follow like clockwork. Asking the very same government that is squandering oil wealth to promote clean diesels? Fat chance.

China - The Dark Horse In Green Car Race

Previously, this blog mentioned that shifting interest from fossil fueled petrol / diesel powered vehicles to electric or hybrid vehicles will merely shift the resource competition and wars from oil to rare earth metals. The shift in strategic influence will be less focused on Saudi Arabia and be expanded to include countries like Bolivia and China.


The following is an excerpt from a New York Times article, China currently accounts for 93 percent of production of so-called rare earth elements — and more than 99 percent of the output for two of these elements, dysprosium and terbium, vital for a wide range of green energy technologies and military applications like missiles.

Deng Xiaoping once observed that the Mideast had oil, but China had rare earth elements. As the Organization of the Petroleum Exporting Countries has done with oil, China is now starting to flex its muscle.

Even tighter limits on production and exports, part of a plan from the Ministry of Industry and Information Technology, would ensure China has the supply for its own technological and economic needs, and force more manufacturers to make their wares here in order to have access to the minerals.

In each of the last three years, China has reduced the amount of rare earths that can be exported. This year’s export quotas are on track to be the smallest yet. But what is really starting to alarm Western governments and multinationals alike is the possibility that exports will be further restricted.

Staggering statistic isn't it? That China controls more than 90% of the resources required for not only the next generation cars, but also for all portable electronic devices from cellular phones to notebooks.


As an example, the latest third generation Toyota Prius requires 1kg of neodymium for each of its electric motors. The Prius has 2 main electric motors. The Prius NiMh battery requires up to 15kg of lanthanum. And Toyota is targeting an annual sales of hybrid (including plug-in hybrids) of 1 million units a year by 2012. Go do the math and consider where will these rare earth metals be sourced from. It's definitely not going to be anywhere near Toyota's own Tsutsumi plant where the Prius is currently made or even near Toyota's battery partner Panasonic EV Energy's newest plant in Taiwa Miyagi.

Those "analysts" folks have been projecting many positive sales numbers for hybrids and EV in the future, and that one of the major push in this is the lowering cost of hybrids with wider adoption. Personally I still don't understand how will this work out eventually. Closer to reality, the cost to produce clean diesel engine vehicles are not coming down. In fact they are actually going up, given the additional technical challenges to fit diesel engines with particulate filters to control emission of fine particulate matter and selective catalyst reduction for NOx control as well as a host of other precision ignition control functions which an equivalent petrol engine does not need to keep itself environmentally legal. Then you have the increasing cost of producing diesel fuel - with strong competition not only from diesel vehicles in Europe but also farm as well as power generation equipment in rapidly developing markets of India and China pushing demand up. The cost of rare metals required in a conventional emission control system of a diesel is only a fraction of that of a hybrid or electric car. So how is it possible that the cost of hybrids is going to be reduced over time when the same is not observed in an existing popular technology?

China has since come under heavy fire from Western powers since news of the Chinese Central government's plan to limit or even ban export of these minerals. Below is taken from another article by NY Times.
BEIJING — Chinese officials said on Thursday that they would not entirely ban exports of two minerals vital to manufacturing hybrid cars, cellphones, large wind turbines, missiles and computer monitors, although they would tightly regulate production.

China produces more than 99 percent of the world’s supply of dysprosium and terbium, two rare minerals essential to recent breakthroughs in high-technology industries.

A bureaucratic reshuffling in Beijing this year prompted a review of Chinese policy, and regulations were drafted that would ban the export of these minerals. That incited anger and dismay from Western governments and multinational companies that depend on Chinese supplies.

Wang Caifang, deputy director general of China’s Ministry of Industry and Information Technology, tried on Thursday to allay concerns that the draft rules would become the final policy, saying the regulatory review was still under way.

“China is very responsible. We will not take arbitrary decisions. All our decisions will be consistent with scientific development,” she said in a speech at the Minor Metals and Rare Earths 2009 conference in Beijing. “China will not close its doors.”

During an interview after her speech, Ms. Wang said that China would continue to set an annual quota for the export of each mineral, adding, “I don’t think it will be zero.”

Pushing Chinese car makers to develop their own hybrid / electric cars fits in neatly with China's own strategic interest. Unlike the US, oil is not traded in Chinese yuan / renminbi currency. It has no further interest other than selling extracts of its own oil reserve. Given that oil is mainly traded in US dollars, promoting oil trade irrespective of whether it comes from the Middle East or its own domestic oil wells is crucial for the US economy. China is determined not to be held hostage by volatile regimes of the Middle East in the same way US is. Plus it has yet to significantly tap into its own vast oil reserve. Recent unrest in China's own Urumqi district could be manipulated by various Islamic interest groups. Currently China prefers to deal with African states (which are just as volatile) for its oil, possibly to avoid conflicts with US who have various interests and alliance with Middle East states. The current largest lithium ion battery manufacturer in the world is BYD, a company which Warren Buffett has a share in it. BYD has leap-frogged all other car makers by producing the world's first plug-in hybrid car - F3DM. Though many choose to dismiss its achievement.


Promoting EVs and hybrids will allow China to exert its own influence in the same way oil cartel group OPEC is currently doing. Plus, China is a developing country with very little legacy infrastructural baggage. Compared to developed markets of US and Western Europe, China has greater flexibility to retrofit its transport and power grid network to support EV and plug-in HVs than developed countries. Compared to major car producing countries like US, Western Europe, Korea or even Japan, China have invested very little in internal combustion engines.

China's push for environmentally friendly vehicles is not so much done out of their concern for the planet. It's pure politics and sits in very well with their strategic interest. China is not just stopping at cars. The Chinese government has strong intentions to make China the main producer of green vehicles, from electric scooters, passenger cars to buses and trucks in the near future. Large amount of subsidies are currently being dished out to taxi fleet operators and local government agencies to purchase domestically produced hybrid or electric vehicles.

Related link :
The great powertrain debate - diesel vs hybrid.
EVs - the great leveller for the auto industry?
Busting Myths About Hybrid Battery Reliability

Lexus IS-F Evolution and Lexus LS 2010 Minor Change

A follow-up on an earlier post on future Lexus models. New images on the Lexus IS-F "Evolution" aka IS-R and LS 2010 Minor Change have leaked been leaked out by Japanese publications.



a) 150kg lighter than a standard IS-F through extensive use of carbon fibre materials in front hood, roof top, side fenders and trunk lid and front seat frame.
b) Additional of a rear spoiler
c) Torsen LSD
d) Revised firmer but better handling suspension
e) BBS alloy wheels
f) Known internally as 182A
g) Rumoured to include a Nissan GT-R styled GPS location based speed delimiter for Japanese market models (presumably this also voids the vehicle warranty)
Source : Mag-X magazine via AutoSpies.com

The next piece of scoop is regarding the 2010 Lexus Minor Change, a last trim and tuck effort to refresh the model before it retires by 2012.

Night Vision is available though it is unclear if this is standard across the LS range.


Updates for the LS hybrid includes a new grille, wing mirror integrated turn signals, front bumper, fog lights, tail lamp cluster, rear bumper and diffuser. But from the pics, it seems to be missing the supposedly Toyota-Lexus hybrid models only blue tinted taillamp / headlamp lenses.


Lastly is a "sports" version of the LS460L. Can't help but think this will appeal to the Yakuza gang bosses, who are usually said to love old school Mercedes S-classes especially the W140 generation model, Maseratti Quattroporte, Toyota Crown. The more powerful and older dudes travel around in a more discreet looking Toyota Century.

5-seater and 4-seater option


L-selection customization package. Only in Japan.

More hi-res images at The Lexus Enthusiast.

GM to terminate partnership with DRB-HICOM

A follow up to an earlier post about the Cruze's delay, well we now know the reason. Seems that GM's local operations is in a big mess and word around is that various business partners of Hicom-Chevrolet Sdn. Bhd. (HCSB) is having difficulty recovering debt from HCSB. Rumour is also rife that GM is considering to terminate its current joint venture with local partner DRB-Hicom.

According to Business Times,
General Motors Corp (GM) has ended its agreement with DRB-HICOM Bhd for the exclusive distribution of Chevrolet vehicles in Malaysia effective August 31, sources said.

DRB-HICOM also faces the risk of losing its job as the local Chevrolet importer as GM is scouting for a replacement, they added.

The US carmaker, sources said, is now talking to the Naza group to handle both the import and distribution of Chevrolet.

In the interim, GM has turned to listed Permaju Industries Bhd's outfit Cergazam Sdn Bhd to manage the franchise from DRB-HICOM.

DRB-HICOM however quickly denied the report, insisting that talks are still on going. Again, according to Business Times, 
DRB-HICOM Bhd has denied a report that General Motors Asia Pacific Holding Co LLC (GMAP), a wholly-owned subsidiary of General Motors Corp (GM), had terminated its agreement with the company for the exclusive distribution of Chevrolet vehicles in Malaysia.

Of course, nobody is taking the statement seriously.

DRB-HICOM is not only a local partner for GM but also for Honda, as it owns 34% of Honda Malaysia. DRB-HICOM have never easy relationship with GM's Chevrolet brand. Previously, Chevy cars were distributed by DRB-Hicom's subsidiary Hicomobil (who seriously damaged Chevrolet's brand value when it disposed off its remaining stock at fire sale prices just prior to their termination).

Complications with the usual local political bull crap has allowed DRB-HICOM to also sell parallel imported Honda vehicles - the Elysion and Stepwgn. I don't know how well does this go down with Honda Motor Co., but there is nothing much that they can do. No car manufacturer will sit by idly when its local JV partner is selling parallel imported vehicles with no proper after-sales support structure that matches their brand reputation as a whole. 

Cergazan and the Naza Group have been rumoured to be in talks with GM to take over the distributorship rights. Cergazam is the current master dealer of Chevrolet and a motor trading arm of timber and logging industry giant Permaju Industries.

PT Honda Prospect Motor Gears Up for Honda Freed Export Operations

The Jakarta Post reported that PT Honda Prospect Motor (HPM) will be expanding its production capacity for the Honda Freed, the sole MPV model distributed by HPM, in a bid to gear itself up for export operations, rumoured to be to Thailand and Malaysia. HPM will expand the Freed's annual production capacity from the current 50,000 units to 60,000 units. At the moment, there is a 3 month waiting list for the Freed in Indonesia.

HPM's plant in Karawang, West Java in Indonesia is currently the sold production hub for the Freed in South East Asia. The first Freed export operation have already started in August, to low volume markets like Singapore and Brunei. Export to Thailand will commence by November 2009 while Malaysia is still uncertain, but is rumoured to be in early 2010.




Images from Kah Motor Singapore catalogue.

The Freed is generally available across all regional markets in two trims - a base model with standard equipments to include electronic driver assistance features like ABS+EBD with BA, i-Pod and MP3 compatible audio, reclining and sliding 2nd row seats, 10-cup holders, two-tone interior and a so-called "king and queen" front row seat (whatever that means). The high range model will include automatic climate control, dual front airbags, Honda's G-CON and ACE high strength body, powered sliding doors (with remote control), driver's arm rest, LED wing mirror indicators, chrome exterior trim, captain seats for the second row allowing a walk through passage to the rear most third row, intermittent wipers and seatbelt pretensioners(can't believe the last 2 basic items are not available as standard). Take note this is a "general trim level." Actual specifications may vary from market to market. Surprisingly, there isn't much noticable "downgrading" (based on the pictures at least) of interior trim quality between those sold in developing markets and those in Honda's domestic market in Japan. But the South East Asian Freed is reportedly to have a slightly higher ground clearance from its Japanese market equivalents. Due to constant threats of floods and poor road conditions, having a high ground clearance is a prerequisite for any mainstream MPVs sold in Indonesia.

In Indonesia, the Freed starts at Rp 237,000. About 40% higher than a top range Toyota Avanza 1.5S. In Singapore, it sells for SGD 84,800. In Thailand, the estimated price is expected to be around B900,000. If the Freed does made it to Malaysia, expect a price tag within the range of RM100,000 plus upwards. Due to its higher price and a more premium image, the Freed is not a real competitor to the Avanza or Nissan's Grand Livina. It actually takes off from where Nissan left when it discontinued its Serena. At the moment, ignoring the slow selling Naza Ria (Kia Carnival) there aren't any MPV model within the RM100k plus to RM140k price range. The market is now somewhat filled by decade old grey imported Toyota Estimas. But many are put off by both the Estima and Naza Ria due to its large size and high running cost (higher engine capacity). In the case of the Naza Ria, it is also related to perceived quality. Since the Freed is powered by a fuel efficient 1.5-litre engine found in the City and Jazz, and backed with manufacturer warranty (no more dodgy grey imported vehicle documentations and service history) and Honda's famed high quality, it should stand a good chance.

The Freed's name is derived from the word "Free" and "Do." Japanese cars always have very unusual sounding names. Back in Indonesia, the largest MPV market in South East Asia, the Freed is still far from challenging Toyota's all conquering Avanza and Innova Kijang, the whole country is basically run over by these two models. But consumers in urban Thailand and Malaysia have a higher expectation and are keen to have a more premium passenger car based MPV. It will be interesting to see the market's response. Interestingly, Honda calls the Freed a MUV (multi-utility vehicle) rather than a MPV. Not sure what defines a MUV (sliding door?).

Related link :
Honda Freed to be launched in Indonesia
Asian Honda Motor Planning an Avanza-Innova Killer?