Astra Hints at Raising Car Prices - The Jakarta Globe

Astra Hints at Raising Car Prices - The Jakarta Globe
Cubans aghast at car prices as new law kicks in - AP News 1/4/2014 ...
Updated : Car Prices Crashing !! Kia Rio RM40,800 - OutSyed The Box
Cubans Shocked At Prices As Foreign Cars Go On Sale « Tammy ...

Posted: 07 Jan 2014 06:16 PM PST

By Francezka Nangoy on 9:16 am January 8, 2014.
Category Business, Corporate News
Tags: Astra International, Car prices

A worker conducts final checks on the wheels of a Toyota car before handing it over to a customer at the Toyota Astra showroom in Jakarta, in this June 7, 2010 file photo. (Reuters Photo/Supri)

A senior executive at Astra International, the largest automotive distributor in the country, has hinted the company may start raising car prices later this month as the rupiah continues to weaken.

Johnny Darmawan told Jakarta Globe on Tuesday that the company had held off any increases even though a falling rupiah was making imports more expensive. Astra imports parts such as engines and LED headlamps.

Prijono Sugianto, Astra's president director, said in November that if the rupiah remained above Rp 11,000, the company would pass on the extra costs to its customers. In December alone, the rupiah lost 1.8 percent, while in 2013 it fell by 26 percent, making it the worst-performing currency in the region.

The rupiah has fallen partly on the outflow of foreign funds after the US Federal Reserve said it would start tapering its stimulus program. Concerns of a widening current account deficit also contributed to a weaker currency.

On Tuesday, the rupiah fell to 12,262 against the US dollar according to Bank Indonesia's midpoint price, its weakest level since December 2008. It lost 26 percent last year, pushing up costs of purchasing goods abroad significantly that companies may be forced to pass on to their customers.

"Price increases are imminent, maybe as early as this month," Johnny said, without sharing details on the price increase.

The company is yet to report its sales results for 2013, but Johnny believes Astra — through its brands Toyota, Daihatsu and Isuzu, will maintain its 54 percent market share for the year.

Johnny was quoted as saying by Bloomberg News on Tuesday that Astra's Toyota sales rose 7.1 percent in 2013.

In the January-November period, Astra reported sales of 602,310 cars, up 8.3 percent from the same period a year earlier. Meanwhile, domestic car sales totaled 1.13 million units in the 11-month period, up 10 percent from a year earlier, according to data from the Association of Indonesian Automotive Manufacturers (Gaikindo).

This year, Johnny, who is also an executive at Gaikindo, said he does not expect much change in sales volume.

"Considering the economic conditions, I expect the market to be flat this year," Johnny said, referring to the high cost of borrowing.

Finance companies have also been raising their loan rates in the past year, in line with the central bank's tighter monetary policy to keep inflation under control.

Shares of Astra fell 0.4 percent to Rp 6,825 on Tuesday.

Cubans aghast at car prices as new law kicks in - AP News 1/4/2014 ...

Posted: 04 Jan 2014 11:53 AM PST

HAVANA (AP) — Talk about sticker shock!

Cubans are eagerly flocking to Havana car dealerships as a new law takes effect eliminating a special permit requirement that has greatly restricted vehicle ownership in the country. To their dismay on Friday, the first day the law was in force, they found sharply hiked prices, some of them light years beyond all but the most well-heeled islanders.

A new Kia Rio hatchback that starts at $13,600 in the United States sells for $42,000 here, while a fresh-off-the-lot Peugeot 508 family car, the most luxurious of which lists for the equivalent of about $53,000 in the U.K., will set you back a cool $262,000.

"Between all my family here in Cuba and over in Miami, we couldn't come up with that kind of money," said Gilbert Losada, a 28-year-old musical director. "We're going to wait and see if they lower the prices, which are really crazy. We're really disappointed."

Cuba's Communist-run government traditionally has placed huge markups on retail goods and services paid for with hard currency, a policy that amounts to a tax on people who can afford such goods. The practice applies to everything from dried pasta, to household appliances, to Internet access.

The astronomical sticker prices on the cars will likely mean fewer sales and the state leaving money on the table, noted Philip Peters, a longtime Cuba analyst and president of the Virginia-based Cuba Research Center.

"There's a lot more money to be made at lower price points," Peters said. "It's a short-sighted tax-man's mentality. ... Paradoxically, they mark it up so much that they're not going to make any money. But that's the mentality."

Havana legalized the sale of used cars by private individuals in 2011. But longstanding rules remained in place requiring Cubans to obtain a Transportation Ministry permit to purchase a new or used car from state-run dealerships. Permission took months or years to obtain, resulting in a black market in which car buyers would often quickly flip them for a big profit.

The new law eliminates the need for a permit, but does not allow Cubans to import automobiles directly. The government retains its monopoly on that, and alone decides a vehicle's market value. Some exceptions will still exist allowing diplomatic missions and foreign entities to import vehicles.

The Ferrari-like price schedules for even mundane new cars are a signal that automotive scarcity and high demand will likely continue to reign in Cuba, which is famous for the 1950s American cars that still rumble through the streets long after they became museum pieces elsewhere.

Because replacing a car is so difficult, those lucky enough to own a finned Detroit classic or a boxy Russian import go to great lengths to keep them on the road as long as possible, swapping in makeshift parts and resorting to creative soldering.

At a used car dealership in western Havana on Friday, there were a few relatively affordable options.

A 1997 BMW was the cheapest vehicle and the first to sell shortly after the dealership opened at 8 a.m. It went for $14,457 to a young man who declined to talk to reporters, so it wasn't known many miles it had previously logged.

But even many of the used cars had eye-popping asking prices, such as a 2009 Hyundai minivan that listed for $110,000.

"Let's see if a revolutionary worker who lives honorably on his salary can come and buy a car at these prices," said Guillermo Flores, a 27-year-old computer engineer. "This is a joke on the people."

In the past, permit holders typically bought used vehicles, often former rentals with high odometer readings that went for around $5,000-$8,000. New imports generally sold at about a 100 percent markup before. There was no explanation for the sudden, across-the-board spike in prices.

Most Cubans still earn government salaries that average around $20 a month, though some make significantly more as musicians, artists, employees of foreign companies and diplomats and doctors sent on foreign missions. Many others get financial support from relatives overseas.

But some who had managed to scrape together some savings said they're now priced out of the market.

"With these prices ... those who will be able to buy are the privileged, or the bandits," said Alfredo Boue, a 25-year-old cook. "I think the bandits are not the ones (stealing) in the streets, but the people who set these prices."

People were aghast and angry as they perused a list of prices posted outside the dealership. Some said it felt like something out of science fiction. One woman asked sarcastically if there were any bicycles, because surely that would be the only thing she could afford.

Priority was given to people who had obtained a permit under the old system, but Antonio Diaz, a 66-year-old retiree who came expecting to pay $5,000, left empty-handed and disgusted.

"What am I going to do with this letter?" he said, brandishing his now-useless permit. "I can't buy anything. I don't have the money. That was supposed to be the car for my old age, which I was going to buy after a lifetime of work."

"I'll have to resign myself to living without a car," Diaz said, shaking his head.

___

Associated Press writer Peter Orsi in Havana contributed.

Updated : Car Prices Crashing !! Kia Rio RM40,800 - OutSyed The Box

Posted: 04 Jan 2014 09:58 PM PST

Updated at the end.

Sorry folks - this is from a car dealer in Cedar Rapids, Iowa. The Kia Rio 2013 is selling for about RM40,000 only. Here is the car.

The same car sells here for how much? Anyone knows? RM90k, RM120k, RM160k? We usually pay three or four times market prices for cars.

To all you 'Proton School of Management' graduates out there who think that the highest car prices in the world are ok, dont complain when the tolls go up, the prices of your kids workbooks go up, prices of fish go up, prices of vegetables go up and so on.

Apa bezanya antara harga kereta naik dengan harga ikan, ayam, sayur, daging juga naik?

Also jangan marah bila harga rumah dan kondo naik gila. Using your same kepala hotak punya illogic if high car prices are ok for you, then higher house prices should be even better? Yes or no? The higher the cost of living the better. Macam tu ke?

Anyway, to be less delirious here is some write up about the Kia Rio.

The 2014 Kia Rio is Set to be a Top Subcompact
2013 Kia RioWith the 2013 model drawing ample praise from drivers and critics alike, it's only natural that drivers are looking forward to the 2014 Kia Rio. While you can get the 2013 model now at McGrath Kia in Hiawatha — just a 10-minute drive north from Cedar Rapids — Kia has been tight-lipped about what its successor might hold. In short, we don't know much, but we're happy to make some educated guesses. Read on for our thoughts.
The Rio was only recently redesigned for the 2012 model year. Since Kia clearly has a winner on its hands, we don't expect major changes for the 2014 model year.
The 2013 model is available with stop/start technology — which will turn the engine off to save fuel in idle situations — and we see no reason why it wouldn't be available in the 2014 Kia Rio. Perhaps it will become standard and we might see the introduction of new fuel-saving technologies, too.
Every 2013 Rio comes equipped with a 1.6L four-cylinder engine that offers up 138 hp and 123 lb-ft of torque; it can come paired with either a six-speed manual or automatic transmission. It's a possibility that we could see a very slight uptick in power, but this also doesn't seem especially necessary.

Sadly you can only get this for RM40,000 at McGrath Kia at Hiawatha, which is a 10 minute ride from Cedar Rapids in Iowa. Err that is just beyond Kuala Kangsar - about 10,000 miles beyond.

Updated: Here is how car prices are calculated in Malaysia.

Cars "suffer" three kinds of 'taxes'. (A tax is a tax ok, no matter what you call it. You can call it sales tax, GST, Excise Duty, Import Duty, Just for the Heck of it duty or whatever. It is still a tax on the consumer.)

Cars "suffer"

1. Import Duty of 0% - 30% (obviously for imported parts, CKDs and CBUs)

Cars from countries with whom we have Free Trade Agreements (FTA) suffer 0% Import duty.

Cars from non FTA countries can suffer up to 30% Import duty.

2. Excise duties of 65% - 105% (by engine size).

National cars suffer 5% - 10% Excise duties.
Non national cars, CBU imports of engine size bigger than 1.5L can suffer the full 105% excise duties.

3. Sales Tax 10%

Finally there are also the profits margins, salesman's commissions etc.

4. OCEs (importers profit, dealers profit, salesman commission, compulsory accessories, add ons etc)

Here is a calculation for a Japanese car of smaller than 1.5 Litre engine size. (Possibly Made in Thailand).

It has an ex-factory cost = RM21,000

Plus 75% Excise duty = RM15,000

OCE = RM 44,000
--------------
RM80,000

Add Sales Tax 10% = RM8,000

Final Selling Price = RM88,000

Can anyone guess what car is this?

This car sells in Thailand for about RM56,000. In the US the price is about RM51,000.

In Malaysia we are paying RM89,000. Note that if we subtract the 75% Excise Duty (RM15,000) and 10% Sales Tax (RM8,000) that is RM23,000.

So RM88,000 - RM23,000 = RM65,000.

The big chunk is the RM44,000 OCE (profit margins, commissions, compulsory options, accessories). I think the "AP" costs (for recond cars only) also have to be implied somewhere in here. APs are only needed for import of recond cars but they have a big impact on the prices of all new cars in Malaysia.

Did you know that APs are issued free of charge? There is no payment other than Isi Borang and maybe some processing fees. But no 'AP' no recond car import. So there is an "implied value" to the AP.

That is also why the car prices jump so much. It does not make sense.

We have to totally abolish APs for recond cars, reduce the Excise duties and Import duties.

This does NOT mean that the import of recond cars should be banned. Allow the import of recond cars without AP and with minimum duties and taxes.

The 10% Sales tax sounds ok (pending the GST - we dont know how that is going to work out).

Here is some news :

Daim calls for abolishing open APs for cars

Tun Daim Zainuddin says government has to take positive steps in the soon-to-be-revised National Automotive Policy (NAP) in order to consider the interests of larger sections of the population rather than a selected few.
suggested that the government consider abolishing the open Approved Permits (APs) policy required for the import of vehicles to help reduce the cost of owning cars in Malaysia.
"Removing the APs would translate into cheaper cars for the rakyat," he said here today.
Mercedes-Benz Malaysia Sdn Bhd President and Chief Executive Officer, Roland S. Folger, who had said that such a move would mean cheaper cars and encourage car manufacturers to increase their investments to produce more affordable cars locally.
"For me, there is one way we can reduce car prices. It's a simple solution to the issue (and that is to) do away with open APs," Folger told The Sun newspaper recently.
Daim said ..consider the interests of larger sections of the population rather than a selected few.
It has been reported that 98 companies (UMNO cronies) are Open AP holders for the import of cars into the country.
Industry analysts have often debated how to make the local automotive industry more competitive, ..for cars to be more affordable locally.
removing open APs would not hurt government revenue collection
Industry analysts say that the government could do away with an extra layer of people in the business equation and pass on the cost savings to the rakyat as open AP holders charge several thousand ringgit for each transaction processed.

Bernama.

Cubans Shocked At Prices As Foreign Cars Go On Sale « Tammy ...

Posted: 05 Jan 2014 08:05 AM PST

Because Utopian Socialist Dictatorships work for well 'for the people.'

Via BBC.

Cubans have reacted with shock after foreign-made cars went on sale for the first time since the 1959 revolution at what some termed "crazy" prices.

The state has a monopoly on new car sales and has set massive mark-ups.

A Peugeot 508 is listed at $262,000. Peugeot's UK website puts prices from $29,000. State salaries in Cuba average about $20 a month.

Freeing up car sales is the latest in a series of reforms. A permit to buy new vehicles is now no longer required.

However, only a minority will benefit.

The BBC's Sarah Rainsford, in Havana, says the stream of people at one used-car store in Havana's upmarket Miramar district were in for a shock. She says the most commonly uttered phrases were "this is madness" and "what a lack of respect", referring to the government.

One of those outside the dealership, Suzanne, told the BBC: "The prices are crazy. No Cuban who works for the state can buy at that price. They have zero chance of getting a car."

Another, Antonio, said: "We're speechless, it's a big surprise. I don't know what the government's strategy is. Maybe this is just a test phase. But the prices are excessive."

The government argues profits will be placed in a special fund to develop public transport…But one Cuban resident, Daniel Rojas, asked: "At these prices, how many people can buy the cars? So where's the money to invest in public transport if no-one can buy them?"

Car Prices Blog

Wednesday, 8 January 2014

Astra Hints at Raising Car Prices - The Jakarta Globe

Astra Hints at Raising <b>Car Prices</b> - The Jakarta Globe

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