Vehichles Price is Expected to Fall?

Honestly, I do not know much about these. My knowledge still fundamental. Still, I read from other blog written by Syed Akhbar Ali, he spoke out his mind:

Car Prices In Malaysia
Digest this article, after that, you may need to vomit. What is the Malaysian Govt doing all these while. Ripping off our Rakyat for the last 30 yrs with APs designed to benefit a few well connected Bumis, the UMNO/BN have robbed millions of citizens in this fiasco, under the pretext of protecting our local industry. The Govt have forgotten we Malays are the largest customers in the country. What is the NEP policy doing ?? Ripping off the Malays (which forms 65% of the consumer base) to benefit a few UMNO politicians !!!


BMW 535i sells for RM178,000 in the US


In the United States of America (a developed country which we are also
aspiring to become by the year 2020) a 2009 model BMW 535i Sedan is
selling for about USD50,367.00. This is only RM178,000 - about the
price of a Toyota Camry 2.4L here in Malaysia . The same BMW sells in
Malaysia for about RM450,000.


BMW 328i sells for RM155,000 in the US


The 2009 model BMW 328i 2 door Convertible sells for USD44,014 or
RM155,369.00 in the US . In Malaysia the same car sells for over
RM460,000. This is an untenable situation.


Audi A4 2.0T Cabriolet Convertible sells for RM142,000 in the US


The 2009 model Audi A4 2 Door 2.0T Cabriolet Convertible sells in the
US for USD40,328.00 or RM142,357. In Malaysia the same car would sell
for about RM265,000.


VW GTI 2.0T sells for RM85,000 in the US


In the US the 2009 model Volkswagen GTI 2.0T sells for USD 24,039 or
RM85,000 only. In China the same car will cost around RM60,000. Over
here the same VW car sells for about RM200,000.


And the 2010 model Toyota Camry 2.4L sells in the US for USD 19,659.00 or RM69,396 In Malaysia the 2008 Toyota Camry 2.4L sells for
RM170,000. Toyota Camry 2.4L, 2010 model. RM69,000 in the US


Car prices in Malaysia are about three times higher than the prices in the United States. We are a developing nation. Our land and labour costs are so much cheaper than the US . Why are our cars so expensive? It does not make any sense. Tak masuk akal.


Then here are some car prices from our neighbour Indonesia .
The Toyota Altis sells in Indonesia for about RM46,000. The same car sells here for around RM 112,000. Again we are three times more expensive than Indonesia


The Honda Jazz sells here for RM108,000.. In Indonesia the Jazz sells for RM 36,000. Three times more expensive.


We are paying ridiculously high prices (and actually impoverishing the Malays - who are the largest buyers of cars in Malaysia) to support an out of date, out of touch with reality motor car policy.


We are paying the highest car prices in the world to support the Proton and other locally made cars as well as support a mind boggling AP policy which only benefits a relatively few rich Malays. A disproportionately large number of Malays and other Malaysians are
being impoverished to subsidise the wealth of a few inefficient rich.




26 million Malaysians have to pay three times more for their cars just to support Proton and 120,000 people who are directly and indirectly involved in the motor sector in Malaysia and the AP holders. That is a ratio of 216:1.


This ratio of 216:1 is too skewed. 26.0 million happier people can contribute many more votes than 120,000 members of an inefficient motor industry. 26 million unhappy people can change a Government. (The maths is not really difficult here)


And this outdated policy is impoverishing the Malays more than anyone else.


Here is some news from our DPM Tan Sri Muhyudin Yassin about our car
policy. This is truncated:


Muhyiddin assures govt support for automotive parts and component sector


1. KUALA LUMPUR, May 26 - The deputy prime minister said special focus
will be given to "facilitate and encourage" the development of the automotive parts and component sector despite the current global and regional economic downturn.


2. "Under the CEPT and Asean Trade in Goods Agreements, Malaysia has agreed to eliminate import duties on all products in the Normal Track on January 1, 2010. This includes motor vehicles, auto parts and components," he said.


3. He pointed out that . .. . the motor vehicle sub sector in Malaysia will not be directly impacted because of its heavy dependence on the domestic market.


4. "The Malaysian government recognises the contribution of the
domestic automotive industry towards the development of the country."


Para 2 sounds promising but then Para 3 and 4 basically says that the Malaysian motor car industry will continue to be protected. This means we will continue paying the highest car prices in the world for automobiles.


Cuba kita kira : kalau kereta Honda Jazz di jual dengan harga yang sebenarnya (lebih kurang RM36,000 saja) dan bukan pada harga sekarang
(RM108,000) maksudnya bayaran bulanan pembeli kereta akan jadi kurang,
mungkin sepertiga sahaja daripada bayaran bulanan sekarang.


Jika sekarang orang bayar RM1,500 sebulan untuk beli Honda Jazz, kalau
harga kereta lebih menepati harga pasaran dunia, orang kita perlu
bayar sekitar RM500 saja sebulan.


Maksudnya tanpa Kerajaan perlu membuat apa pun (merangsang ekonomi,
belanja berpuluh billion Ringgit duit rakyat untuk stimulus dan sebagainya) setiap rakyat Malaysia yang membeli kereta yang seharga dengan Honda Jazz akan dapat menjimatkan sehingga RM1,000 sebulan daripada kos sara hidup bulanannya.


This is like giving the car buyer an RM1000 pay rise without incurring
any extra costs for the taxpayer, the Government or the economy. It
will greatly reduce the cost of living in Malaysia and spur greater economic growth too.


Tapi sekarang, yang menjadi mangsa dulu dan yang menjadi miskin dulu
orang Melayu juga. Orang Melayu yang paling ramai sekali menjadi pembeli kereta dalam negara kita. Orang Melayu kebanyakannya makan gaji - tiap bulan dapat gaji tetap. Bila harga kereta naik gila, yang menjadi miskin di saf depan sekali adalah orang Melayu juga.


In absolute numbers, the Malays are suffering the most because they are the most in number among the fixed income people who also buy cars.


Some folks said the other day that Proton has 150 major component
suppliers, dealers, distributors and about 500 other parts suppliers too. Of the 150 major component suppliers, about 15 of them are listed companies. In total they employ about 120,000 people. The Proton supply chain is a mix of bumiputras and non bumiputras. But here is a sad fact : none of them are operating at their level best efficiency.


Our motor car policy is forcing Malaysians to subsidise Proton so that
Proton can sustain major inefficiencies in the Malaysian economy. This is not a good thing at all.




We have to unwind this situation. Set a target of 18 months from now to unwind all protection for our motor industry. Remove the impoverishing AP policy also in 18 months. Let Malaysian car prices reflect world market prices for the same makes of cars.


If a BMW 535 sells for RM178,000 in America , it should sell for a little less here in Malaysia (our rentals and salaries are cheaper). Fw: Car Prices In Malaysia


The Ministers continue making pronouncements about the car industry as though nothing has happened. I hope everyone will please wake up. The
Government has a real chance of getting thrown out of office in about three years. The people will not accept inept answers anymore.


The ridiculous car prices in Malaysia is an issue that is just beginning to get more attention and publicity. It is going to become a really big issue in the near future. Be forewarned.

  

so, what do you think?? =p

How countries currency value changes?

Recently report said that the Malaysian Ringgit is expected to rise further against the U.S dolar (U.S). Ringgit start to strengthen in the first quarter and the last quarter of 2010 when they substantially weakened at the year 2009. Thus, the present performance indicates the improvement of the country's economic condition. I have been curious all the time and been asking how does the currency value rise and decline. I am not an economic analyst but here I got after I done several readings and researches. I could generalized it in several factors:-

1. Instability Based on Supply and Inflation

One factor that affects on how a given currency's rise and fall is the amount a given currency in circulation and relative inflation. Currency in circulation which also know as "currency in hand" means physically used to conduct between the and businesses rather than stored in a bank, financial institution or central bank. For example,  if a country begins printing money, the value of a currency is diluted due to inflation, so its value will fall relative to other world currencies. If a large amount of the money supply were somehow burned up, it would have the reverse effect. Easy to say the more you print the money, the lesser the value of the money.

2. Alteration of Value Based on Demand

Like all markets, currency is affected by both its supply and demand. The desirability, or demand for a given currency also results in changes to its value. The more foreign countries want to hold a certain currency, the more it is worth, and the less they want it, the less it is worth. There are many factors that affect demand for a currency, such as interest rates between countries, political factors, expectations and trade balance. For instance, if you knew a certain country was going to enter a costly war, which might result in the collapse of its government, you would probably want to get rid of any currency you had from that country, and the value of its currency would consequently fall. In general, live exchange rates are a reflection of one currency's desirability versus another at a given point in time.

The issues that happened in Malaysia, to those who are familiar in the field of economic and finance has increased their concern in the ringgit currency. They were forecasting the USD will continue to decline. So, tribes of fund managers that have a fund take an action to invest billions in other currencies including the ringgit Malaysia. Tun Dr. Mahathir has given a warning toward this issue so that Malaysia be aware of the foreign fund managers that come and nonstop hitting the index points to rise over 1500. It is their job. They come to continue buy, buy and buy. When the index growing up later, there are the possibility to occur an unexpected  problem to the retail investor. As they are continuing to buy, the fund managers also continuing to sell, to sell and to sell until the stock price fall. Finally, the retail investors which they could not manage the profit from the stock price lead them to bankruptcy.

3. Purchasing Power 

Purchasing power is a term used in economics that is defined as the amount of goods and services that can be purchased with a given amount of currency. It is an important in economic deliberation when determining the cost of living and standard of living in different countries. Because in the perfect market, the purchasing power of one currency would be the same as another currency. Which is a consumers are able to buy the same bundle of goods in one country, that he would also be able to by exchanging his money and buy it in the another country. This ideal of exchange rate rarely to happened. Besides, there are many factors that influenced to the perfection of the idea. Such as, trade barriers,  imperfect competition and prices that do not immediately adjust to reflect a change in a currency's value. That why when traveling to certain countries can seem very cheap, while sometime can be expensive. When a currency has a greater purchasing power relative than other, the currency are said to be undervalued, while the less purchasing power are considered as overvalued. For instance, let assume if someone buy an iPhone about RM2500 in Malaysia, and iPhone in United State cost $840. But the person in United State can purchased almost 3 iPhones for every dolar. So, it is said that the Malaysian ringgit is overvalued because he can't buy as many iPhone with ringgit as he can do in United State.