Am currently sitting in a cafe with WiFi trying to get some work done. Playing on the flat screen TV is ESPN's highlights of the 2009 season of FIA WTCC. I hardly follow any motor racing series, not even Formula One. At least not as regularly as I used to. Watching the highlights, I get an odd feeling seeing the works BMW team 320si cars being pushed around and hunted down with no mercy by packs of yellow liveried "lowly" Seat Leon TDIs. If this is the impression that a regular guy like myself get, what more about the BMW Motorsports boys in Munich. After all, this is a brand that takes great pride in building performance and driver oriented cars. In as recent as 10 years ago, Seat is hardly a name that anyone would associate with having the capability to challenge BMW on the track. But obviously Seat has benefited tremendously from going under VW's umbrella.
Those petrol powered BMW are fast but it is clear that they are struggling to keep up with the pace of the Seats powered by a VW developed TDI engine. It's certainly not a driver issue as the BMW works team include names like Andy Priaulx and Jörg Müller. Both the 2009 driver's and manufacturer's title are won by Seat. Even in this year's privateer's league "Independents' Trophy" is won by Tom Coronel, in another Seat Leon. Last year, the points gap between BMW and Seat was a whopping 52 points. This year BMW managed to close the gap to just 3 points.
A thought crossed my mind - when would BMW finally concede to building a diesel powered high performance car? So far, none of the M-badged models are diesel powered. Audi's R8 V12 diesel is already making people wondering why bother with a 645Ci?
Rumours of a diesel powerplant for the next generation M3 have been circulating for quite some time but so far there have been no reliable info. The main concern for BMW is that the characteristics of a diesel engine does not quite fit well with the expected characteristics of a BMW, particularly its M-badged models.
Below is a highlights video on the 2009 season WTCC.
I am not really into the drifting scene so the name Sak Nana a.k.a Kiki might not be very familiar to me. Until Bangkok Post did a story on Thailand's most famous drifter, and of course the person is none other than Sak Nana.
But this is not going to be a post about the art of sideways powersliding driving, or as I would prefer to call it - steering not so much with your hands / legs but more with your balls. The purpose of this post is story an inspiring life story.
After doing a bit more Googling on him, I realised that many of us, especially fans of the TV series 5th Gear have actually seen him on TV before(or in the case of most readers on this side of the world - on our computers). Watch the video below :
At that point of time, I have no idea he was Thai. From his name I thought he was Japanese! Kiki is featured on 5th Gear because in the UK, he is recognise as Europe's founder of drifting, plus he founded a drift club that operates out of Silverstone circuit. The Thais must be very proud to have a talent like Kiki, who put Thailand's flag on Silverstone, the capital of motorsports. And unlike many talents, he actually returned to his home country to contribute further to his country's development.
Below is some video of Kiki Nana's sideways action in the recent Toyota Motorsports Festival in Thailand.
Yes our very own local "Prince of Drift" Tengku Djan did pipped Kiki in the recent 2009 Formula Drift ASEAN series final. But that's beside the point and I think there is very little to separate between the driving talents of the two. This post is about how big of an impact in man's life once he found his direction and purpose.
Some actions of Tengku Djan in the last Formula Drift Thailand.
It has been confirmed by GM that Saab will be closed down after talks with Dutch niche sports car maker Spyker Cars NV feel through. GM did not give a specific timeline to shutdown Saab but it is expected that production and distribution facilities and laying off staffs will begin by January. Our heart goes out to all Saab employees at Trollhattan and other parts of the world, including many Saab dealers. For them, there is certainly nothing much to look forward to in this Christmas.
Chinese car maker BAIC (Beijing Automotive Industry Holding Co) have earlier this week purchased most of the intellectual properties of Saab for an undisclosed sum, but some reports put it at $197 million.
The reason given by GM for the failure to reach an agreement with Spyker was because the deal could not be completed in time. GM’s European president Nick Reilly explained to the press “Despite the best efforts of all involved, it has become very clear that the due diligence required to complete this complex transaction could not be executed in a reasonable time. In order to maintain operations, Saab needed a quick resolution.” Bollocks! Who were the ones rushing GM to complete the deal? The banks? Capitol Hill? The deadline was set by GM themselves!
The boss of Spyker Cars Victor Muller said "We sincerely regret that we are not able to complete this transaction with GM. We worked 24/7 for three weeks, but the complexity of the transaction, in combination with the strict deadline, simply did not allow us to complete the transaction in time. Our thoughts are with the wonderful management and employees of Saab in these challenging times."
I have always wondered why did GM even bothered to purchase Saab in the 90s. Back in 1989, GM paid $600 million to purchase control of Saab from Fiat, and then parked the Swedish brand at a corner, ignoring it and gave whatever leftover cash to be invested into Saab. Remember the abomination of a car GM made by building the 9-2X out of a Subaru Impreza estate!
Like a unique gifted child that is different from the rest, Saab is not your typical white goods maker run of the mill car company like Hyundai or Toyota that cobbled cars for the masses, cars designed by committees after extensive car clinics and surveys to make sure they appeal to the widest group of people possible. No, Saab was born out of an airplane maker. It's name was short for Svenska Aeroplan Aktiebolaget (the Swedish airplane company). It was founded by a group of airplane engineers who decided to built a car, out of the initial founding group, only one of them had a driving license. Because of this unique heritage, Saab's design was never constrained by conventional thoughts. They fitted airplane inspired instrument illumination that makes night driving easier, ignitions are in the centre to protect the driver's knee in a frontal collision, they did elk/moose test way before any other car company saw the need to do so. Saab is a unique brand and has to be nurtured and marketed very differently. Even during its darkest days under GM, die-hard Saab fans can still be found, much like Mac fans in those pre-Steve Jobs years. It does say a lot about Saab's design philosophy and attraction to a niche group of fans, who wants performance but not in a shouty BMW kind of way. Saab's signature centrally located ignition key. It made a lot of ergonomic sense on a LHD car (get in car, put on seatbelts, start engine, release parking brake with the same hand) but not so in a RHD car. It could also save the driver from smashing his knee against the ignition switch and key in a nasty accident. The nature of the design also made hot-wiring a Saab by thiefs particularly difficult.
Collisions with elks is a serious concern in Scandinavia and Saab is among the first (the other is its fellow Swedish rival Volvo) car company to do elk crash test. This partly influences Saab's reputation for safety in the 70s and 80s.
Some of the many innovations by Saab : 1. First car company to fit seatbelts as standard. Seat belts were first fitted into aircrafts, to allow fighter pilots to fly upside down. Being an airplane maker, Saab quickly adapted this invention to cars and the Saab GT 750 was the first car to have seat belts fitted as standard. Engineer Niels Bohlin at another Swedish rival car maker Volvo would later built on this to develop the first 3-point seatbelt.
2. Side impact protection Saab was the first car company to fit reinforced safety beams into doors to protect occupants against side impact collision.
3. Dual brake circuits Brakes are critical safety items and Saab was the first car company to incorporate redundant brake lines to protect against potential failures. It is now a standard feature on all cars.
4. Turbo charging Forced induction was first used by airplanes as high altitudes would mean that available oxygen for combustion of fuel is very limited. Saab was the pioneer in the field of turbocharging in passenger cars back in the 70s. This particular area of innovation would later be dominated by Japanese car makers in the 90s. This particular author is rather fond of the 900 turbo, with its infamous torque steer as a family friend owned one and it was this author's first exposure to turbo charging.
5. Front wheel drive Along with Citroen's Traction Avant and early DKW models (precusor to present day Audi) and the original BMC's Mini, Saab was a pioneer in front wheel drive - the dominant drivetrain configuration today. Rallying victories by FWD Saab models further pushed acceptance of FWD in the marketplace. In a place like Sweden, front wheel drive layout makes the most sense. As the weight of the engine is on top of the driving wheels provided traction and gave the most forgiving handling - highly important in a place that snows so much and is dark for a large part of the year.
6. Split field side mirror A very simple and often taken for granted feature. Saab was the first to introduce this and it quickly became a standard item on most modern European cars.
Major innovations from Saab stopped coming out once Saab went under GM's control. Recent Saab products have been heavily criticised, but to me that is only a symptom of a greater problem of neglect by the management of GM. It is unfair to put the blame on the highly talented guys at Trollhattan. Today will be a very sad day in automotive history. Looking back, Saab could have been one of automotive history's greatest what-ifs, alongside Tatra. With the right management and money, Saab could have been harnessed the same way VW harnessed Audi. Both were pretty weak brands when these giants picked them up. Today, Audi is harassing BMW and Mercedes, while Saab died under GM's leadership.
The superb looking but still-born 9-5 replacement that did not make it into production.
Below is a very famous video made by Saab in the 80s, featuring the 9000. This was probably the peak of Saab's history.
Don't throw those orange peels away so soon. There is money to be made in them, according to Yokohama that is. Yokohama Tire Corp have came out with a way of extracting oil from orange peel as a substitute to petroleum in manufacturing tires. dB Super E-spec is the world's first tire that is made using orange peel oil extract. According to Yokohama, nearly 20 gallons of petroleum go into a set of tires, meaning that about 5 million barrels of oil annually are consumed by a 10 million-vehicle market. By infusing oil extracted from orange peels into natural rubber, Yokohama has cut the amount of petroleum in its dB Super E-spec tires by 80 percent.
The problem with most eco / optimised for high fuel economy tires is that they rely on hard compounds, which have less grip under normal driving conditions until they heat up at higher speeds. With this new orange oil extract infused with natural rubber compound, the properties of orange oil will heat up faster, delivering better grip.
Yokohama did not provide any direct comparisons but did mention that the orange tire also has 22 percent lower rolling resistance than the standard tire on a Toyota Prius, meaning better fuel economy. Also, it weighs 2 pounds less than most original-equipment tires.
The dB Super E-spec is currently only available in USA while European introduction is in the pipeline. Sizes are tailored to suit most hybrid vehicles, 185/65R15 88H, 195/65R15 91H, 195/55R16 86V and 215/60R16 95V for the Prius, Civic Hybrid and GX (CNG bi-fuel), Camry and Accord hybrid, as well as Nissan Versa (Tiida / Latio) and VW Golf.
And no, the tire doesn't give out orange smoke during burn outs / drifting like Kumho Ecsta MX-C that gives out red smokes. And yes the tire is black and no it doesn't smell of orange.
The dB Super E-spec 's recommended retail price is around $105 though you might get better rates from online retailers like tirerack.com. But as mentioned, it is only available in America.
Yesterday we learned that BMW will not be replacing its current fleet of hydrogen powered 7-series; Hydrogen 7. The news implied that the Bavarian automaker is reducing its focus on hydrogen power. We now understand better the reason not to replace the Hydrogen 7. Today BMW announced that it will be building a fleet of electric powered 1-series coupe. BMW explains that the electric powered 1-series is the next phase of BMW's Project i - the first phase saw introduction of a fleet of electric powered MINI E to selected fleet users / individuals in LA, NY, London and Berlin.
The electric drive 1-series will be unveiled in next months North American International Autoshow as the Concept ActiveE. More info can be found in BMW's press release here.
The ActiveE is powered by a lithium-ion stack made by SB-LiMotive, a JV between German autoparts giant Bosch and South Korean battery specialist Samsung SDI. At the moment, BMW is the only OEM partner for SB-LiMotive. The company also have an existing contract to supply hybrid vehicle battery packs to American autoparts maker Delphi from 2012 to 2021. There is even an iPhone app for users to check the battery charge status, available range, locate next nearest charging stations as well active the airconditioning before getting into the car.
I am not sure how many share my opinion - but I think BMW is using far too many eco-marketing monickers than it should. Efficient Dynamics, eDrive, ActiveHybrid and now ActiveE. But I guess its part of BMW's culture. Just go have a look at a typical BMW brochure. The company loves acronyms! Contrast this to a brochure of a similar model from Mercedes-Benz or Audi or even Lexus. Maybe BMW owners like to learn up all these techno sounding names to lord over less informed mortals in a one of those bar-table talks / male ego one-ups.
Looks like the future of alternative powertrain is almost certain going to be electric than anything else. However BMW did emphasise that it is not abandoning hydrogen power just yet. In the ActiveE's press release, it is stated that "Electric drive provides an additional option for a lasting form of individual mobility alongside the ongoing optimization of all models with a pure combustion engine, the market launch of BMW ActiveHybrid technology in serial production vehicles and the BMW Hydrogen 7 as evidence of the suitability of hydrogen drive for everyday use." As mentioned in the previous post, BMW have spent more than 30 years and a lot of money researching into hydrogen power. You can't expect them to just turn their back on H2 drive and go pure EV the way Renault-Nissan is doing.
It appears that BMW have finally admitted what many have been suspecting all along - that the hydrogen economy is not sustainable and efforts to promote use of hydrogen as an energy source, especially for transport is going to meet with a dead end. Early this month, BMW's R&D development officer and board member Klaus Draeger said in an interview with German business newspaper Handelsblatt that BMW will not be building any new hydrogen powered test fleets.
Back in 2007, BMW built 100 units of its Hydrogen 7, estimated to be valued at almost a million dollars each, to be leased to celebrities and high profile individuals in Europe and USA. Among the famous owners who were presented with the cars were Jay Leno, Angelina Jolie, Brad Pitt, Edward Norton, Cate Blanchett, Hale Berry, Richard Gere, Prince Albert II of Monaco.
The Hydrogen 7 was only leased to selected individuals and is not available for purchase. Klaus however did not say that BMW will cancel all development work on hydrogen powered vehicles. BMW is not the first car maker to switch their stance on alternative powertrains, VW have also previously admitted that hydrogen powered (and fuel cells) are not yet ready for large scale operations.
BMW's rationale in adopting hydrogen power is that hydrogen is the most abundant element in the universe. Burning of hydrogen will only emit clear water, a major plus point in the quest for an ultimate eco-car. But more importantly, the the characteristics of hydrogen combustion best matches BMW's character of being a driver oriented vehicle, and it can still be adapted to operate using existing internal combustion engines. The drawback? Who is going to invest in building hydrogen filling stations throughout the country? While hydrogen is abundant, they do not exist on their own, thus requiring a very complex chemical processes to recover hydrogen either from water or other hydrocarbons. Transport and storage of hydrogen is a far more costly affair compared to transmission and storage of electric power. At the moment, it takes more energy to extract hydrogen from water or any other sources (i.e. petroleum) than the energy that is carried by hydrogen.
But like any innovation, there will be risks involved. BMW first started researching into hydrogen power way back in the 1970s, with the E12 5-series as a demonstration vehicle. Back then, electronics, battery and computing technology were not advanced enough to clearly point that EVs and hybrids are the way forward.
Now however, it appears that EV has the most support from governments and energy companies. After all, most of the electric power transmission network is already laid. And electricity can be generated from a multitude of primary sources - solar, wind, biomass, hydro, even existing dirty sources of coal and petroleum. The problem now is more on the end user (charging infrastructure) and administrative (billing processes and rates). BMW is already running fleet trials of electric powered MINIs, called MINI E in London, LA, NY and Berlin.
With the new revelation, it is now left to Honda (FCX Clarity), Daimler (F-cell) and Mazda (Hydrogen RE) to continue development work on hydrogen powered powertrains.
Having said all that, nobody is certain what will be the dominant alternative powertrain of the future. And not all car companies have pockets deep enough to sustain multiple research programmes on alternative powertrains, each research programme running in parallel. They have to decide on one that they wish to back, as well as which to drop. Toyota is one of the few companies that are rich enough to run multiple research programmes in parallel, under its so-called "ultimate eco-car" umbrella.
Going to miss BMW's Clean Energy promo video though. One of the better ones I have seen. Must have cost a bomb to shoot.
As soon as VW announce its purchase of 20% of Suzuki, at least 2 major VW related news hit the web. One is regarding VW's goal of controlling up to 10% market share of the Indian car market within the next 4 to 6 years. Another is the announcement of joint development between VW and Suzuki for a small low cost car, speculated to be the Alto replacement. The two back to back news reflects the level of background planning and due diligence that have already been conducted prior to this. There is a very clear goal in VW's intention of increasing its stake in Suzuki. Contrast this with the take over of Chrysler by Fiat. Until today, nobody is certain what will happen to Lancia or Alfa Romeo. While Sergio Marchione have already announced his plans for Dodge, Jeep and Chrysler - the long term direction of these American brands is still not quite crystal clear. Part of his options laid out is to rebadge Lancia models as Chrysler, to be sold outside Europe. I wonder how in Marchione's infinite wisdom believe this is going to work out. Fiat's purchase Chrysler appears to be one of "buy first, plan later."
Part of VW's plan for India is to increase its dealer network to 200 showrooms within the next 2 or 3 years. At the moment, VW brand vehicles only controls a dismal 2% of the Indian car market while Maruti-Suzuki controls more than 60%. The group's presence in India is mainly via Skoda. Of course, supporting this expansion is VW's new plant in Chakan, West India, that has an annual capacity of 110,000 units. It currently produces the VW Polo and Skoda Fabia hatch while an unspecified estate will also be assembled by second-half of 2010.
Maruti Suzuki have also hinted that the replacement for the Alto (known in India as A-Star) minicar could be jointly developed with Suzuki, with a target price of around USD 4,300 to USD 5,400. The VW-Suzuki model will be slotted below the cheapest VW branded model - the Up!, that will be launched in 2011 with an estimated price of USD 8,800. But introduction of the Up! in India as well as other developing markets of Asia is still unconfirmed.
The current Alto is the best selling car in India, controlling more than 50% of the segment. It is also developed in India (rather than Japan), with many of the engineering input from Indian engineers. The Alto is currently only made in Maruti-Suzuki's plant in Manesar, India and is exported to Australia and Europe. It is a far better example of technology transfer that benefits the locals, contrast this to result of deal that the Malaysian government offered to Daihatsu via Perodua. Though the company is always keen to point out that x number of engineers are sent to Daihatsu in the process of developing a particular model.
In 2008, the gap between Mercedes-Benz and Audi in the sales charts was 114,611 units. Within the first 11 months of 2009, Audi have reduced the gap by more than 60%. Now only the 44,100 units separates between the Stuttgart car maker and the fancy new comer from Ingolstadt. The gap with BMW has also been halved. Last year, a total of 184,294 vehicles sold separates BMW and Audi. As of November 2009, the gap has been reduced to only 93,112.
In a previous post, we have talked about Toyota's upcoming low cost car (LCC), codenamed Emerging Family Car (EFC). Come Jan-5 2010, we will be treated with the first concept model of the EFC in next month's New Delhi Auto Show. Initial information suggests that the car was targetted to be priced below USD 7,000 but a price closer towards USD 8,000 (RS 4lakhs) appears to be more realistic. Both a sedan and hatchback body type will be made available. Note : image above is an example of a low cost car and have nothing to do with the Toyota EFC.
Series production of the EFC will begin in December 2010 in India in Toyota's second plant in Bangalore, operated by Toyota's Indian outfit Toyota Kirloskar Motor Pvt Ltd (TKM). TKM's planned annual volume for the EFC is 70,000 units. According to information gathered from Toyota Tsusho Corp (trading arm of Toyota Motor Co.), Toyota's global production volume is projected to increase by 500,000 units in 2010, with a large portion of these contributed by EFC. The EFC will eventually be sold in major developing markets like Brazil, China and parts of ASEAN. In ASEAN markets, it is rumoured that Toyota plants in Vietnam and Indonesia are both vying to be the regional production hub for the EFC.
The EFC is rumoured to receive significant input from Daihatsu, but there will not be any Daihatsu badged equivalents, which actually makes sense because despite their expertise in building cheap small cars, Daihatsu's presence is very small outside Japan, and aside from Daihatsu's "indirect control" of the Malaysian car market via Perodua, they have very little success in developing markets to speak of. In Indonesia's - the company's largest market in ASEAN, Daihatsu equivalents of Avanza (Xenia) and Rush (Terios) trails behind their Toyota equivalents. In July this year, Daihatsu had to withdraw from China due to very poor sales. Apparently, Chinese consumers didn't respond very positively to its Xenia (sold here as Toyota Avanza). The idea that China is a land of opportunity certainly do not apply to Daihatsu.
But still, though the EFC might never be badged as Daihatsu, don't rule out the possibility of the EFC being sold under Perodua. It's the only way to get around Malaysia's protectionist policies and to avoid having the Malaysian government giving them an earful. Entry level versions of Perodua's Viva sell around 30,000 units a year. As the name suggests, margins for low cost cars are very thin, thinner than the insulations on these cars so manufacturers have to compensate by substantially increasing volume. So TMC needs to dig deep and hard to find market for these cars.
But this leads us to the on-going debate on why should the Malaysian taxpayer continue to prop up a Japanese company with a local front, at the expense of so many other opportunity cost, from so many other potential investments. Nobody else outside Japan snaps up the Sirion (Myvi's Japanse badged cousin) as much as us.
EFC is set to launch in India by 2011, with other overseas market to follow. So, are we going a new entry level model from Perodua between 2011 and 2012? Slotted below or even replace the Viva BX, currently the cheapest car in Malaysia? If the sedan version of the EFC is introduced, this could also be Perodua's first sedan model. Of course, the above are purely speculation based no reliable information from either Daihatsu or Perodua.
Was reading an article by MTM regarding the Persona facelift, nothing that is particularly surprising but you can read it here. What I would like to draw readers attention to however, is regarding author Chip's comments that taping up pre-production vehicles will only attract unnecessary attention. So one of his suggestion is to put on badge of other vehicle makes as a disguise. Well, VW did exactly that. Look at the photo below of the VW Amarok, during a media preview with pre-production Amaroks, in Argentina - the location of the Amarok production hub. Notice how the "Mitsubishi" logo are twisted around in all the vehicles. You may read the initial driving impression here, and also further information here. Initial impressions from the press have been overwhelmingly positive. But how well or how fast will the market accept this newcomer is left to be seen. The reputation that the Hilux currently commands is staggering and it's position as the king of trucks will not be toppled so easily overnight by some new comer. Nevermind the fact that many experienced off-roaders and hardcore truck users will tell you that the current Hilux is too hyped up, an Isuzu D-Max or even the Ford Ranger is just as capable, if not more. While a Mitsubishi Triton is a far more comfortable place to be in if you spend a significant amount of time on tarmac roads. But like so many other things, it is the reputation the precedes it. And the Hilux has over 40 years of history behind the name. I have always told people that the Hilux is the oldest model in its segment now, and it has one of the weakest engines, but it still commands pole position in the sales charts, from Australia to Thailand to Malaysia. Some reputation huh.
Among the less publicised features in the Amarok is a 12V-DC power outlet at the top of the dashboard. Finally! Someone realised that it is really annoying to have wires dangling all over the dash and air-con vents whenever the driver wishes to use a portable sat-nav GPS unit. Also, the Amarok's antennas are integrated into the side mirrors. Brilliant! No more winding down your windows to retract the roof mounted antenna whenever you drive into tight parking complexes. The rumoured DSG gearbox is not expected to make it into production, due to demands of low-speed off-road / crawl use (4x4 Low mode) and heavy loads, a 6-speed manual is more durable. Automatic transmission will be available eventually but no timeline is given.
The first public showing of the Amarok will be in Jan-1 2010, in the Dakar Rally (despite its name, is actually run in South America as the original route in Africa is rife with bandits now), an event which VW is the official vehicle supplier. 5 VW Race Touaregs will be competing, and these competition vehicles will be supported by five service trucks, three equipment trucks and two race trucks. 20 Amaroks will be used by the race organizer A.S.O, while another 15 will be used by the press and VW Motorsports factory team staffs. Another 6 VW Multivan Panamericana will also be used to transport the factory team staffs. So you can imagine what a logistical and customs clearance headache it is to organize the event. The vehicles are already on their way to Buenos Aires in Argentina and is expected to arrive by 28-Dec. No Christmas for VW Motorsports. Santa's coming on a bright blue truck I guess.
The Panamericana is a jumped up version of the Multivan (Transporter in some markets) fitted with a higher ride height, all-terrain tires, 4MOTION 4WD and a mechanical differential lock. It is not very widely available outside Europe. Not even the camper-van / bush mobile mad Aussies get it in their market. Probably have to do with RHD configuration / homologation cost.
About 3 months ago, we first heard of rumours that VW will acquire a 12th brand, which was widely speculated to be Suzuki. VW's uber supremo Ferdinand Piech is an old hand in mind games. During the Polo's launch in the Italian island of Sardinia, he slyly dropped hints to the media that VW is looking acquire 3 more brands after Porsche. When asked by the media if he was referring to Suzuki, he only answered that he has great respect for the small company with a reputation for technical expertise, very much like Piech himself. Osamu Suzuki initially rubbished the report. But today, it is official - VW will acquire a 19.9% stake in Suzuki.
According to Automotive News, Osamu Suzuki was quoted "I don't want you to misunderstand: Suzuki is not becoming a 12th brand for Volkswagen," Suzuki said when asked whether the company might get a German CEO in the future. "I don't want other folks telling me how to do things." Suzuki Chairman Osamu Suzuki and VW CEO Professor Dr. Martin Winterkorn
But it is quite obvious that it is only a matter of time before Suzuki becomes a wholly owned subsidiary and a first Japanese brand to go under the arms of the German giant. The patriach of Suzuki, Osamu Suzuki is already 80-years old with no heir to inherit the position. Osamu-san was formerly a banker known as Osamu Matsuda, until he married the Shoko Suzuki, the granddaughter of founder Michio Suzuki, and adopted the Suzuki family name. How many more years does one expect Osamu-san to continue to run the show? He also have a reputation of being a very brash and difficult boss to work with and it is not uncommon that managers get an earful from him during press events. It is only eventual certainty that Suzuki will soon become another brand owned by VW.
The news comes after another announcement of a similar Euro-Japanese partnership by the PSA/Peugeot-Citroen and Mitsubishi. The two companies already have an existing model-model collaboration with the Mitsubishi manufacturing its Outlander for PSA to be sold as a Citroen C-Crosser and Peugeot 4007 in Europe. But most bean counters were quick to dismiss the deal nothing more than a union of the weak that is unable to take off very far until both companies sort out the existing high debt ratios.
Out of the deal, VW is promising Suzuki access to crucial alternative powertrain technologies include electric, hybrids and clean diesels. VW in return gets to tap Suzuki's resources and market dominance in India, where it is now the No.1 selling car brand in India under a JV with Maruti. But other than clean diesels, VW does not have any hybrid powertrains that has actually made it to the market. They once showcased a Golf diesel hybrid concept but high cost and a VW's stance that hybrids are still no match to its BlueMotion and TDi clean diesel powertrains meant that the car did not see the light of the day. The main goal is to allow VW to fill up one of the last few remaining pieces in the puzzle before VW can position itself to overtake Toyota to become the No.1 car maker in the world, a goal which VW wants to achieve before 2018. Toyota have played down their interest in maintaing their lead in the volume game, but let's be honest - if there is only one title to the rank of a game master at playing the numbers game, it has to be Toyota. Internally, the company is mad about chasing huge sales volume. Maybe things have somewhat slowed down under Akio Toyoda's leadership, especially after near 5-year long expansion blitz by the previous president Katsuaki Watanabe, that partly blame for Toyota's historic financial loss. But VW needs to be careful, history has shown that the position of being the No.1 carmaker leads to a slippery slope. Just ask GM and even Toyota, amidst their unprecedented losses and numerous serious vehicle quality issues.
According to Automotive News, in the first six months of 2009, Volkswagen sold 3.265 million vehicles and Suzuki sold 1.15 million. Their combined sales of 4.415 million units would be larger than top-ranked Toyota's 3.564 million. It's all part of a numbers game. VW is already the king in China, now the largest car market in the world. India is another rapidly rising car market, and within the next 2 decades India is expected to overtake Japan and Europe to be the world's 3rd largest car market, after China and USA. So it makes sense for VW to line up their chess sets to corner all the major markets. The only significantly growing car market in the world are from BRIC nations - Brazil, Russia, India and China. Out of the 4, VW have already conquered China and Brazil. Doing business in Russia is extremely tricky, not to mention dangerous and I don't think VW wants to plunge in with Putin and Co. so soon. Renault-Nissan with its subsidiary Dacia however, is already drawing up huge plans for Russia following their success in Eastern Europe. So again, the next most logical choice is India. While VW was busy with China, the Japanese of Toyota and Honda are quickly building up their presence there. At the moment, VW is mainly represented by Skoda, with very limited sales of VW vehicles at the moment. But VW is catching up fast. The company have just completed a new plant in Chakan this year and started building the Skoda Fabia in May this year, while production of Polo have just started. A Polo sedan, currently only available in China and Brazil is also set to begin next year.
We have seen the Franco-Japanese alliance of Renault-Nissan to be very successful. Mitsubishi and PSA too have inked a deal. And now Suzuki with VW. This brings us to the next question - is the idea of a "pure Japanese" company going away slowly? Despite Japanese company's international presence, Japanese corporate culture are not known to be very receptive of foreign cultures. Just take a look at the board of any large Japanese corporation, contrast that with GM or Ford or even Renault-Nissan.
Only giants like Toyota might be able to stay afloat on its own. Honda sells more car abroad than they do in their domestic market. Honda is a bit of an oddball in its home country and is not that well received except for a few models that hit the mark - like the Fit (Jazz) and Insight. Part of the reason is that Honda is not part of any big boys club of keiretsus in Japan. And in Corporate Japan - the keiretsus group are very powerful as they indirectly serve each other to lock out foreign competition (or in the case of Honda, from outside their circle). It is one of the reason why foreign car companies can almost never penetrate into Japan. It is also worth mentioning that Suzuki's Wagon R kei car is actually the best selling car in Japan though this is not seen in the JAMA (Japan Automobile Manufacturer's Association) registration figures. For reasons which I do not know, JAMA does not track kei car registrations, and kei cars are the largest car segment in Japan. Please share with us if you know why does JAMA omits kei cars in their registration reports.
So we have all seen the official images of the new replacement for the Alfa 147 - the Alfa Romeo Giulietta , or formerly known as Milano. The Milano name was dropped at the last minute following the controversial relocation of Alfa's operations in the city of Milan to Turin. In effect, parent company Fiat S.p.A is severing all ties with the historical city of Milan, where Alfa Romeo was founded 99 years ago. According to Fiat, the move is supposed to “increase efficiency and save costs.”
Yesterday I received a news ticker on another Alfa Romeo related news - on Fiat's CEO Sergio Marchionne announcement regarding the future of Alfa Romeo. Details can be found here but in short, Marchionne have lost patience in waiting for the turn around of money losing Alfa Romeo. Marchionne's ultimatum for Alfa is either :
1. Replacing the 159 with a D-segment sedan and the 166 with an E-segment sedan built in North America on Chrysler platforms, but unique to Alfa and sold by Alfa worldwide.
2. Freezing investment in the brand after the 147 hatchback is replaced by the Giulietta. This means that the 166 will not be replaced, leaving the brand with the Giulietta and the MiTo, Alfa's first small car, as its only fresh models. The rest of the Alfa range - the 159, the Brera coupe, the Spider and the GT coupe will continue to be sold.
Option no.2 sounds like a very childish threat to Alfa Romeo, and from a business point of view I certainly cannot see any strong rationale behind it. How would freezing investment solve Alfa's problem? The previous 156 gave Alfa Romeo a short but much needed sales boost. But the company failed to keep the momentum going. The 147 was a great car but did not quite hit the necessary volume.
The Alfa Romeo brand has a very illustrious history. It was after all the automotive world's Ferrari before Ferrari even existed. Until today, it is still sort of a poor man / young man's Ferrari (or a glorified Fiat, depends on how you see it).
Many car makers would clamber to have the kind of recognition that Alfa Romeo enjoys. The brand may not top sales charts, but almost every consumer, irrespective of how oblivious they are to cars, knows that Alfa Romeo is an Italian car maker. The same can't be said for many up and coming Far Eastern brands from China / Korea / India, who despite their deep pockets, still have a long way to go in building their brand. Throughout the entire thought process of a car buyer in deciding a car purchase, from brand awareness to model awareness to info seeking to consideration and purchase (and also repeat purchase), the name Alfa Romeo will almost always appear in the initial brand awareness stage. But then it rapidly falls out when we move further along the thought process. A ubiquitous model like Corolla in contrast, will hang on quite strongly in each stage.
If Marchionne does not wish to have anything to do with Alfa Romeo anymore he should consider off-loading Alfa to one of those Chinese brands who have billions in guaranteed credits and government loan but with no brands to buy. The Chinese have just lost out on to purchase Saab and Opel (only Geely got lucky with Volvo). Before Alfistis start firing angry emails at me for suggesting that their idolized brand to be Chinese owned, please pause for a moment and think. Would a shrewd Chinese businessman go through the trouble of raising the finances and regulatory approvals, and then allow the brand to be runned down to the ground by cheap low quality Chinese products? Did Tata turn the Jaguar XJ replacement into an Indian interpretation of what a Maharaja should ride in? Didn't SAIC gave a new life to MG-Rover, and now the Chinese designed MG6 is set for production in MG's UK plant in Birmingham? The Americans at GM bought over Saab and look what they did to the brand that pioneered FWD and turbocharging. Same thing with Ford and Volvo. It's not the nationality but the business acumen and leadership that matters.
The problem with Alfa Romeo is never about its brand. There are quality issues but none anymore worse than many other European makes, particularly the French. Older folks will still talk about tin worm and rust on Italian cars but my generation have experienced none of that rubbish. Quality issues alone is not serious enough to drive Alfa Romeo to the ground. Alfa products are fine with very little that is wrong in concept. Alfa Romeo's problem lies with the management of Fiat. Quality issues and mismatch between products vis-a-vis market demands are not problems but merely symptoms of a bigger problem. The root cause of all these symptoms can be traced back to the management of Fiat. But as usual, management takes more credit than it is due but does not take any responsibility for screw ups within their subsidiary or subordinates. Ever heard of the maxim if the learner hasn't learned the teacher hasn't thought?
To be fair, Alfa's problems are not Marchionne's own doing. The problem with Alfa Romeo can be traced back all the way to the 1970s when the company was nationalized by the Italian government. Going under Fiat S.p.A's arms did improve things a little but not enough to stop the brand's gradual slide.
Putting European Union type number plates on cars is the new trend these days. I think it started to become fashionable in Singapore around last year, and neighbouring Thailand and Malaysia is also quickly catching up on the fad. I have seen various cars with the iconic blue stripe with an EU star being pasted on their number plates. It is not entirely legal but I highly doubt owners will run into any problems as it is just a sticker that does not in any way make identification of the vehicle registration numbers difficult. But this particular car that I happen to come across is certainly at the very far end of what is acceptable. Even the background and character colours have been changed! Had the car not been spotted in Malaysia, you would think that this really is an EU registered car!
How did the owner get away with it? Same way how so many cars have been getting away with illegally fitted HID light bulbs, window tinting, etc etc. Law enforcement here is a joke. And maybe, police officers might not even realise it is an illegal plate, thinking that it is one of those limousine taxi vehicles / embassy vehicles and what not.
A typical Malaysian car plate looks like this. Well of course, not all of them carry such subliminal message related to phallic subjects. If you need this to be pointed out anymore obvious, think what does the combination PEN15 suggests.
Across the causeway though, things are very different. The Singaporean Land Transport Authority (LTA) is cracking down hard on vehicles with EU plates. Not so much because of the blue stripe or background colour but rather mainly because of the non-standardised character sizes and spacing. If you notice, Singapore registered vehicles all have a very rigidly enforced standardised characters and figures. I can't be sure but I suspect that this has a lot to do with the use the Electronic Road Pricing (ERP) gantry type tolls rather than our conventional gated tolls which causes a lot of unnecessary congestion. It's a bit like our SmartTag, only that it works a lot faster and is a lot more reliable (it's a large contributor to the Singaporean government's coffers and you can be bloody sure that any Singaporean government system whose function is to suck money from the people, there will be 0% downtime / failure). ERP relies a lot on cameras to detect violators who enter ERP zones without sufficient credit in the cash cards / faulty IU (in-car unit). Use of non-standard reflective materials and different fonts might cause problems, but as explained, however tiny the probability is, it must be stamped out. I understand that system is fairly robust as is even able to detect Malaysian registered cars (whose number plates are obviously far from being standardised) who violate the ERP rules. Violators will be stopped when they drive out of Woodlands checkpoint.
It is not just German cars that are fitting these EU plates. Just look at this ricer boy's old Honda City, apparently captured on camera in Thailand. This owner went a step up from the E39 seen above, he even did away with the Thai plate completely!
"AutoIndustrie," the German word for auto industry, is a part time project of a former auto industry executive in Asia. Intrigued by the world and the way things work, he is just as interested in the business of making and selling cars as well as fast exotics.
He can be contacted at autoindustrie[at]gmail[dot]com
"When it comes to cars, everybody (thinks he) is an expert", Lee Noble.
He can be contacted at autoindustrie[at]gmail[dot]com
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