2014 is going to be a great year if you're in the mood to buy a new car, especially if it's a Volkswagen.
Volkswagen Malaysia will be the game maker because of its ambitious targets and its “out-of-the box” strategies.
Not only has it targeted a 40 per cent year-on-year growth from next year to 2018, it is the only car company in the history of the Malaysian automotive industry that has brought in foreign investors to invest in dealerships.
The Taiwan branch of the Swire group has VW franchises in Taiwan and is now in Malaysia. Similarly, the CNB group from China is in Klang.
These are deep-pocketed groups with professional automotive management teams.
Wolfsburg is said to have given its Malaysian VW team a target of 50,000 annual car sales by 2018.
The combined total of European car sales in Malaysia is also about 50,000, or about 10 per cent of Malaysia's 630,000 total industry volume (TIV) expected this year.
While there are critics who doubt that VW's target for a market share that's equivalent to the whole market for all European brands in Malaysia combined, it's also clear that we can't use the normal measures for the car maker.
Of course, VW as Europe's largest car maker has the resources. It plans to build more completely knocked down (CKD) models in addition to the current Passat and Polo.
In addition, it will open more dealerships. It currently has 28 outlets and plans for another 16 to be opened in 2014 with the aim to reach its ideal network of about 50 outlets in five years.
An ambitious push to sell 50,000 units as announced by former managing director Ricky Teh can only be in tandem with a steady growth in the dealer network. If all dealers sell about 1,000 units a year, this would mean that VW Malaysia would need 50 outlets to achieve its target.
The Klang Valley contributes close to 75 per cent of car sales for all motor brands, likewise VW conforms to this distribution trend. It's understood that VW Malaysia recently decided to appoint four dealerships for Sungai Buloh (Wheelcorp), Rawang (Tian Siang), Klang and Batu Caves (Goh Brothers) as well as Puchong (Swire Group, a Taiwan based auto group).
It's also understood that dealership appointments have been decided for Jitra in the North, Batu Pahat and Johor Baru in the South, and Kota Baru and Kuala Terengganu in the East Coast.
This was in response to a recent nationwide advertising campaign to secure dealers in some 16 strategic locations.
Tian Siang and Goh Brothers already are VW dealers with the former in Sitiwan, Perak and Goh Brothers in Ipoh, Butterworth, Langkawi and respectively.
Wheelcorp, a well known Klang Valley and multi-brand dealer with BMW, Ford, Hyundai and Mazda franchises, is a new dealer to the VW stable, but not short of experience in motor retail.
The Swire Group of Taiwan has Puchong as its market territory. It is strong in VW and Skoda brands in Taiwan. This should hold them in good stead to develop the VW brand in Malaysia.
Incidentally, Puchong has been identified by some market research companies as being the hottest in Malaysia.
Seeing as to how the TIV of the Malaysian car market has experienced an organic growth trend of about three to five per cent a year, VW's 40 per cent year on year target for the next five years will be at someone's market share.
Edaran Tan Chong Motor is also eyeing a bigger market share now that Nissan is in a sound financial position and together with Renault, producing more attractive cars for Malaysians.
The Nissan Almera, for example, is said to have become the top selling non-national car this year. We can't tell for sure since the Malaysian Competition Commission has advised the Malaysian Automotive Association to stop providing sales statistics by models.
Car buyers should anticipate that the added competition amongst car dealers would undoubtedly lead to good deals and year-end sales.
While 2014 is going to give a better deal to car owners, going forward, the Ministry of Domestic Trade and the Finance Ministry should work out a deal so that car companies who need to replace “lemon cars” can claim back the import and excise taxes.
It's inevitable that out of the millions of cars, there are the occasional lemon cars that sometimes are needed to be replaced.
Besides other costs, it's an expensive affair for car companies in Malaysia, especially for completely build-up (CBU) units because of the import taxes.
FIM ruling
ONE good thing has come out of this year's double tragedy at Sepang International Circuit (SIC) when a motorcycle racer knocked and killed the flagman. The racer succumbed to his injuries a few days later.
As a result, the Federation Internationale de Motorcyclisme (FIM) has modified the rule and now the flagman stays on track level, but behind the barrier.