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Malaysia’s New Economic Model:
Risks and Rewards
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AseanAffairs Magazine May - June 2010

Prime Minister Najib Razak vows to take Malaysia forward and transform it into a high income nation through economic and social reforms. Initial responses to this ambitious drive are mixed, details are scarce and investors play wait-and-see.Yet, Najib insists he’s got support to push ahead.

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BMW: Driving the Luxury Market in Malaysia
Geoffrey Briscoe, Managing Director, BMW Group Malaysia

Geoffrey Briscoe, Managing Director, BMW Malaysia at the launch of the new BMW 730Li

Growth Ahead for Premium Cars

Consumer spending in the Malaysian luxury or premium car market remained strong despite the state of the global economy in 2009. For us at BMW Group Malaysia, we were able to once again report record sales here in the Malaysian market. In 2009, BMW Malaysia sold a total of 3,564 BMW vehicles and 214 MINI’s compared to 3,514 BMW vehicles and 201 MINI’s in the previous year.

BMW Malaysia’s share of the Malaysian premium segment also increased in 2009 to 40 percent. Moving forward, the combination of the consistent strength of the BMW brand in Malaysia with the fact that we have entered 2010 with fewer of the economic challenges that were present in 2009, I do not expect 2010 to drastically change from that of the previous year.

Nevertheless, I am optimistic that the premium car market will continue to grow from strength to strength. While tax rates and income levels do have an impact on the specific makeup of any particular automotive market, the demand for BMW cars worldwide is by and large generated by individuals who have achieved great success in their careers or businesses.


Launch of xDrive20d

We have been getting very positive interest from the public on the new BMW X1. In fact, the first 40 units of the SAV were quickly taken up by all our 14 strong dealerships. This shows strong commitment and interest from our network who are very much in touch with our customers.

The BMW X1 SAV marries the qualities of BMW’s highly successful X-family of vehicles with the design aesthetics of the BMW 1 Series to provide a versatile, dynamic and agile vehicle in the premium compact segment.


Strengths of BMW Malaysia

BMW is always at the forefront of technical innovation which has resulted in our ability to deliver vehicles that are dynamic, engaging and of the highest quality. Our constant ability to successfully develop and produce entirely new model concepts such as the BMW 3 Series, 1 Series, X5, X6 and now, the X1 also allows us to tap into previously unfilled consumer segments which leads us to fully realise the potential in each market that we are in.

Our goal in Malaysia has always been to deliver the ultimate premium experience behind owning a BMW. As such, aside from enjoying vehicles of the highest calibre, BMW customers also benefit from a host of other services and facilities such as our popular financing programs from BMW Credit; our successful BMW White Card privilege program as well as our strong aftersales programs such BMW Service Inclusive and Repair packages.


BMW’s Efficient Dynamics

BMW EfficientDynamics is a strategy developed by the BMW Group to define a combination of short-term, mid-term, and longterm measures for continued reduction of fuel consumption and emissions while at the same time enhancing the performance and driving characteristics of our cars which is at the core of BMW cars are about.

Each new model created will improve in its fuel consumption and emmision rates in comparison to its predecessor, while also providing superior driving dynamics. One of the beneficial effects of this approach is the fact that BMW models regularly outperform their competitors in their segment in comparative tests, achieving the best acceleration, the most efficient consumption and the lowest emission rates.


BMW Response to Euro-4M

BMW Malaysia believes that the government’s plan to introduce Euro IV standard diesel into the market is a highly positive step, one which we are eager to support.Diesel is often mistaken as the dirtier, cruder and least performance capable option compared to petrol due to its widespread use amongst commercial vehicles. Yet the facts are that modern diesel engines generate 20 percent more horsepower, 75 percent more torque and consume up to 30 percent less fuel compared to petrol.

In addition to this, diesel engines produce 20 percent less carbon dioxide (CO2) than their equivalent petrol counterparts, a significant reduction in the amount of harmful emissions introduced to the environment.


New Economic Model versus Luxury Cars

BMW Group Malaysia is very encouraged by the proactive initiatives that the Malaysian government has taken towards improving the quality of fossil fuels, a key contributor towards carbon emissions, and in encouraging the development of green technology alternatives throughout the Malaysian economy.


Prospects for High-end Market

While many car makers experienced a slump in passenger car sales in 2009 due to the state of the global economy, with many automakers having to make drastic shifts to their overall strategies, the Malaysian Automotive Association (MAA) predicts that vehicle sales in the market for 2010 are likely to hit a new high, surpassing even the previous record 552,316 units achieved in 2005.


Geoffrey Briscoe, Managing Director of BMW Malaysia and Ong Tee Keat, Minister of Transport Malaysia

New Automotive Policy: The Implications

At this stage, it is still too early to tell how successful this move will be. However, we do see some added investments in the country, particularly in the automotive sector.

We at BMW Group Malaysia also welcome the government’s decision to implement EURO 4M specification for petrol and diesel by 2011, which was highlighted in the latest review of the National Automotive Policy (NAP). We see this move as an encouraging and proactive measure by the government to further promote Clean and Sustainable Technology in the Malaysian Automotive industry.

This perspective is one that is very much shared by BMW Malaysia and we demonstrated this when we introduced BMW EfficientDynamics to Malaysian market. As a way of firmly localising Efficient Dynamics in Malaysia, we are paying particular attention to Diesel Technology.


Clean and Sustainable Energy

Today Malaysia is ranked 58th in the world’s per capita CO2 emission rate with 1.92 metric tons of carbon per capita. Although Malaysia contributed to only 0.62 percent of the world’s 8.23 billion metric ton of carbon in 2006, our country’s 1.92 metric ton per capita is well above the world’s average emission level of 1.25. That is one issue we need to address.

Comparatively amongst other countries within our region, Singapore is ranked 21st with 3.42 metric tons per capita, and Thailand with 1.14 per capita is ranked 91st in the world. Thailand’s low emission ranking is in some part due to the country’s acceptance to diesel vehicles, and a approach that Malaysia can adopt in reducing our CO2 emission levels.


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