Monday, March 26, 2007

Lulu Not Too Sure What Proton Is Up To

Killing two birds with one stone. Making the car affordable to families who need something bigger than a kancil, whilst clearing their excess stock. Clever, or so Lulu thought.
However,
yesterday's Star highlighted that with 10,000 units booked, there was a 3 month wait, and Proton would step up production
step up production?

Of course Lulu's alarmed!

Don't they know how to quit while they're ahead? Either they are selling cars at "normal prices" with such a huge margin that with a RM8496 discount, they are still making money, or they are building cars and giving away money with it.
Have you heard Kenny Roger's The Gambler?
You got to know when to hold 'em, know when to fold 'em
Know when to walk away, know when to run
You never count your money when you're sittin' at the table
There'll be time enough for countin', when the dealin's done
Now, every gambler knows, the secret to survivin'
Is knowing what to throw away, knowing what to keep
'Cause every hand's a winner and every hand's a loser
And the best you can hope for is to die in your sleep

You need to know when to walk away.
unless of course, they're not playing to win.
Other possibilities
1. Capture market share, like those beer companies which throw prices during CNY for the sake of this number game.
2. Making sure their p&l looks so bad, no foreign company will want to buy them, and the government would have to force a local company to take a stake
3. Because of the fixed cost plus the labour workforce, it is better to keep the factories running, even though it is producing at a loss.
4. To produce more cars so that there'll be more cars on the roads making tolled roads a more viable option and increasing income for DBKL when the congestion charge comes in.

4 comments:

kittykat46 said...

Hi Lulu,
Proton probably could sell the Iswara 1.3 at that price with a small profit. The largest fixed cost for manufacturing cars are the tools and dies for pressing the large metal pieces. They are hugely expensive to make 1st time. Iswara's tooling is by now fully depreciated (probably worth RM 1),so they can produce the model with relatively low overheads.
But its a dead-end campaign. The most it can do is fill up unused capacity and consume some End Of Life components.

zewt said...

zewt thinks this is another goodie prior to the imminent E.... lulu knows what E is?

Anonymous said...

The greatest attraction here is the price factor. Kittykat is right about the tools and die thing. As such they can even sell at an even lower price without loss.

There's 102 interesting comments here : http://paultan.org/archives/2007/03/07/proton-saga-merdeka-promo-rm26999/

The first comment sez: 10k also i dun wan….."

LOL!

But seriously, the fact that Proton will have to step up production says nothing about any maintenance of whatever "quality" that there is. In their hype drive ad on this red hot deal, Proton resembles those Telcos ads which is confusingly short on details that matters.

Why, it hasn't even mention that you can buy one on cash and not on loan! What does an Iswara look like after 9 long years of repayment and how much would it be worth? Questions deliberately not meant to be answered.

First affected now will be the second hand dealers. Too bad. It was always the Proton monopoly to blame for their strings of broblem all along.

Buyers will have to take the risk that this Iswara may be dropped like the Tiara. Everyone knows that a Honda Civic is a much better thing than Proton and Perodua but it costs an arm and a leg. If one does not enriches the GLC, one enriches the gomen coffer from the exorbitant protective taxes, all the same. A Hobson's choice.

My 5' 9" frame cannot be accomodated in a Kancil. In a Kelisa, just, perhaps ;). How often will its airbag system require maintenance....how much to pay for its air cond gas, expected not to be CFC like the Kancil's and previous Tiara's - those so-called anti Global warming, Green Earth type. Even here someone has made a killing.

There was once a past rumour that says someone receive a 15K royalty on each Proton sold.

~wits0~

Anonymous said...

Quick calculation on a 9 yr loan repayment says you'll need to pay
RM37,447.61......approximately 10.4K extra.

Namely:
(26999*0.043)*9+26999
=37447.613

It may well be worth less than 5K by then. Two times a sucker, loan buyers.
Ad line ranslation:

"While stocks lasts"
Translated: Poker game, I up you one. And please break your nose in the rush.

"Red Hot Offer"
I tempt you suckers and test my price strangle hold fleecing power in the current market and will laugh all the way o the bank.

"3 months booking list"
I have never need to care about PR because I've always have had my hands on your throat. Biz as usual.

~wits0~