Wednesday, December 21, 2011

Vokkswagen slashes price of 2012 Passat by $7,000 (RM22,000), undercutting Japanese rivals

Here is the news. Unfortunately for us this news is from the USA . .

Volkswagen on Thursday announced that it is cutting the price of the redesigned 2012 Passat by $7,180 (RM22,760) versus the 2010 Passat, thus undercutting the base 2011 Toyota Camry and Honda Accord.

The base 2012 Volkswagen Passat 2.5L starts at $20,765 (RM65,825) compared to $27,945 (RM88,585) for the 2010 Passat.

The top-of-the-line 2012 Volkswagen Passat SEL Premium starts at $33,720 (RM106,892), including shipping.

The pricing strategy slots the new Passat — which is longer, wider and roomier than its predecessor — below the base Camry and Accord.
The 2011 Toyota Camry starts at $20,995 (RM66,554).
The 2011 Honda Accord starts at $21,930 (RM69,518).
VW offers a choice of three engines in the Passat, including a four-cylinder turbodiesel that is expected to deliver 43 mpg on the highway, the company said in a statement. The Passat with the 2.0-liter TDI starts at $26,765 (RM84,845), including shipping..

VW is providing free scheduled maintenance for three years or 36,000 miles..

Read here and here.

Folks, you can drool or salivate. But I think we should be getting angry. What does this mean? It means that we are in the Third World.

How do you describe a Third World country? A Third World country is a country where the people (who want to become the First World) handcuff themselves or tie themselves up with silly policies which actually makes them poorer when compared to the First World (which they are aspiring to be).

How do they become poorer compared to the First World ? Well in the Third World, the people are silly enough to tolerate paying FOUR TIMES the prices for basic goods and services compared to the First World . This is a good description of silly Third World people.

So if the First World pays RM1.00 for a cup of 1st Class Baskin Robbins Ice Cream, we are willing to pay RM4.00. Why? Because we are the Third World . This means we are not clever. We are silly. Nak kata bodoh pun boleh lah.

So please read this. A 2.5 Litre super duper Volkswagen Passat is now selling in the United States for RM 65,825 ONLY. That is less than the price of a Proton Waja in Malaysia or slightly more than the price of a Perodua Alza.

Folks, they also throw in free scheduled maintenance for three years or 36,000 miles. The Camry sells for RM66,000 and the Honda Accord 2.4 sells for RM69,000 in the US.

Over in Malaysia the Volkswagen Passat 2.0 (NOT the 2.5) sells in excess of RM245,000. This is FOUR TIMES the price they pay in the United States.
Their cost of living is much higher. Their land costs are higher than Malaysia, rents are higher than Malaysia, salaries and labour costs are higher than Malaysia, transport and logistics costs are higher than Malaysia, yet they can sell the same car FOUR TIMES cheaper than we suffer here in Malaysia.
Ini tak masuk akal langsung. 

Why are we willing to suffer paying FOUR TIMES the price for cars? Because we are silly. We are not a clever people. We tolerate silliness. WE tolerate the bankrupt AP regime where cronies get APs to import cars which sends the prices of cars to the sky. We tolerate silly duties and taxes all of which are levied to protect a domestic car industry that is becoming increasingly NOT viable - day by day. .
It is becoming more ridiculous. .

Kepada sahabat-sahabat yang tak faham niaga, yang tak faham kira kos sara hidup dsbnya - here is some basic comparison..

The Americans pay RM65,000 for a 2.5 Litre VW Passat - a marvel of modern engineering "Made in Germany ". In Malaysia , you pay RM245,000 for the same car. But lets forget about the VW Passat.

In Malaysia, even if you buy a WAJA you pay about RM70,000. Sekarang cuba fikir ok, if the Americans pay ONLY RM65,000 for a VW Passat 2.5L, then how much do you think they will pay for a WAJA in their country? RM15,000? RM20,000? They will definitely NOT pay RM65,000 for a WAJA.

If they pay RM20,000 for a WAJA, then they save RM45,000 already (COMPARED TO YOU THE MALAYSIAN CAR BUYER). So for the same car, we are paying much, much more than the Americans, FOUR TIMES MORE. We pay more but we get less. Why? Because we are Third World - we are silly.

So the Americans save RM180,000 on the VW Passat alone. For the WAJA they may save RM45,000. That is a lot of money.  With the money that they save (compared to us) the Americans can send their children to private schools, to attend music classes, to college, for overseas holidays, they can buy more things to make their lives better. We cannot. We make ourselves poor because we pay FOUR TIMES the price for the same car. With the money they save, the Americans can also come to Malaysia on holidays, sit in the hotels where our sons and daughters become waiters, to serve them food and drinks. Sometimes the Americans may give our sons and daughters some tips - for which we feel grateful. Baiknya Mat Salleh..
Why? Because we are silly. Nak kata bodoh pun boleh. 

I once sat beside the man who at one time ran Proton (not Tengku Mahaleel).  I sat beside him for about an hour and we spoke about Proton and his other business ventures. 

He said quite proudly that he loved to "turn around" failing Government businesses. Most of these businesses were monopolies. His trick was very simple. He bought the failing Government businesses at cheap, fire sale prices. When the business is sold so cheap, and it has a monopoly licenses (for example express bus company with lucrative routes) of course you can turn it around. Even the "orang buta yang main music" at Jalan Masjid India can turn around this type of business. .
But that is what this ex-Proton Boss was saying quite happily. He did not seem to realise (or rasa malu sikit punthat he was actually profiting from a huge subsidy. His own value added was almost zero.

Folks, if the Government sells Malaysia Airlines to me at RM1.00 - I can turn it around in a week. OK maybe not RM1.00 but some other deep discounted price lah - if the Government slashes the price far enough, yes of course I can turn around MAS.

Here is some simple arithmetic. Say MAS tak untung and tak rugi - zero profit and zero losses - just breaking even. Say the company is worth RM10.0 billion. Say hutang is RM5.0 billion. This means tolak hutang, the net value of MAS is RM5.0 billion. I will buy MAS from the Government for RM5.0 billion. But I have connections. I tell the Government I will buy MAS for RM2.0 Billion only. The Governmnet agrees. This means I already make a 'buta profit' of RM3.0 Billion. 

How do I cash out? First I buy from the Govt at RM2.0 billion. Then I sell MAS to a real airline company for say RM4.0 billion. I pocket RM2.0 billion. The airline company will pay the RM4.0 billion beause they also get 'buta' value RM1.0 billion.
That is the business model the ex-Proton Boss was talking about. This is not business lah kawan. It is called m.a.k.a.n s.a.b.s.i.d.i. At the cost of the taxpayer. At the cost of silly Third World people like us who are willing to pay RM245,000 for a VW Passat when the car should actually cost RM65,000. 

Third World silly people who are willing to pay RM70,000 for a tin can car when for the same amount of money they can buy a VW Passat 2.5 Litre 'Made in Germany' car. .
So we remain poor.

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