What cars may come

KUALA LUMPUR, July27 — What began as a somewhat commonplace — in our country at least — "executive decision" by Terengganu Menteri Besar Datuk Ahmad Said has become a huge issue in the current climate of "lifestyle change".

The state government's RM3.43 million purchase of 14 Mercedes-Benz E200 Kompressors has managed to grab a share of headlines alongside Datuk Seri Anwar Ibrahim's takeover claims and Umno-Pas talks. This is due to what appears at first glance, the sheer audacity of Ahmad's administration in not just approving the purchase but then calling it a "cost-cutting measure".

To begin with, the figure that the state government released — RM1.1 million to upkeep 16 Proton Perdana V6 Executives since 2004 — already seems dubious, as it breaks down to an average of over RM17,000 per car per year. To put this into context, that's within a few thousand of a seven-year loan repayment for that same car.

When it was revealed that the maintenance of several cars, including that used by Ahmad's predecessor, Datuk Seri Idris Jusoh (RM131,449.83) had breached the RM130,000 retail price of the cars themselves – the highest figure was RM175,229 — in the four years they were utilised, it opened up another can of worms.

And then more and more cans were opened as other states revealed that they too had experienced high maintenance costs with their Perdanas. Selangor's new administration was more than happy to announce that the previous one had spent RM288,000 on 12 cars last year (RM24,000/car) with Pahang revealing figures of RM57,700, RM54,000 and RM49,000 for three cars last year alone. As compared to a couple of Mercs which
"only" hit RM42,000 and RM20,000 during the same period.

An expensive cheap car has led to cost-cutting measures via a cheap expensive car.

Never mind that this immediately calls into question whether Terengganu's new Mercs will actually be able to run for under RM17,000/year, the amount of money being spent on maintenance simply boggles the mind of the average car owner. Current market prices put a four-year-old Perdana Executive at under RM50,000.

"Obviously something is seriously wrong. The figures are more than the cost of the car. The only way is if you're completely rebuilding the car – changing the engine and gearbox and most of the body panels. Otherwise it's impossible unless Terengganu has been using the cars to haul timber or as oil tankers to smuggle fuel into Thailand," an industry veteran who has worked with both manufacturer and consumer concerns told The Malaysian Insider.

"This certainly warrants some investigation, if not I would like to be the one with the contract for maintaining the cars," he added.

High as it might be, will an E-Class actually cost less in the long run? An E200K apparently costs just RM700 to service per 12,000km. A senior service crew member said that over the first 10 years of the car's lifespan, an average annual budget of RM3,000-5,000 is adequate for the upkeep of the car.

As far as fuel consumption goes, the general idea that the V6 in the Perdana is a guzzler is statistically warranted since it drinks 7.5 litres per 100km at highway speeds, while the bigger and heavier E200K only uses 6.7.

With the Terengganu government somehow purchasing the 14 Es at the knockdown price of RM245,000 (instead of RM360,000), the four-year budget should be around RM300,000 including fuel. As far as their 16 Perdanas go, only one breached the RM300,000.

Two caveats however. One, The Es will have a higher resale value. Two, the car that breached RM170,000 in maintenance was that of exco member Toh Chin Yaw, which, according to authorised Proton servicer Tenaga Setia, had required repairs due to some "minor crashes".

'On average, the maintenance cost on his car came up to just about RM3,500 a month. Taking into account that the car covered a monthly average of about 4,000km, I would say the amount is more than reasonable," said its manager Tor Kok Seng, who obviously has a different sense of "reasonable" from most Malaysians.

Mercedes servicing staff readily agree that repairs on its cars — both on body panels and internal mechanics — would cost significantly more than Perdana's. In fact, one of the main grouses about the Perdana is its gearbox, which according to official Proton workshops in Terengganu, would cost RM8,300 (this after a 25% markup for late payment, yet another question mark over the state's administration) to replace or just RM3,000 if the owner was willing to install a reconditioned unit.

Mercedes gearboxes – which it maintains and is widely accepted to last a lot longer than a Perdana's – would go into five digits. Ironically, RM23,000 was spent to change the gearbox for Selangor exco Ronnie Liu's Perdana a few weeks ago. He said he was shocked when he learnt of the cost for the new gearbox claiming that he "was only informed after the bill had already been paid."

This state of affairs was met with a frown by a local senior employee at a carmaker who told us: "Surely you have to sign the quotation before accepting service work. Are they signing with their eyes closed? Doesn't the finance/accounts guy raise a red flag? RM3,500 per month for service? This car must be falling to pieces on a daily basis."

Proton has since rebutted these claims with two salient statements. Firstly, that they had not received any warranty claims from the Terengganu state government and secondly, their service records show that a mere RM542 had been spent on average per car per year for the state's full fleet of 35 Perdanas.

It looks like someone somewhere has got dirty hands here but whoever it is, the entire affair is a public relations disaster for all involved. Proton it seems, can do no right in the eyes of the public – one journalist commented that we've spent so many millions saving the company, maybe Ahmad was right to spend a few more to kill it off.

'The one empirical way of seeing if it were possible for Terengganu to end up being saddled with such a bill is to find out the number of lemons (jargon for badly manufactured car) per thousand units and then work out the odds of 14 lemons being delivered to the same customer," an industry expert said to The Malaysian Insider.

"But I don't think that's necessary. It's just not possible given that the Perdana has a high percentage of Mitsubishi parts and is not as localised as lower-end Protons. What this is actually riding on is that Proton has become an easy target due to the general sentiment where nobody has respect for Proton. It's easy to kick a man when he's already down."

Our veteran expert also regretted Prime Minister Datuk Seri Abdullah Badawi's weak stance in allowing Terengganu to keep the cars but only for important dignitaries visiting the state (it is illuminating to note that an exco member has already taken one of the E200K's down to Johor).

"Send one to each state then. How often will Terengganu have 14 VVIPs visiting it? Point is, whatever you do now, it's like trying to close the gate after the cows have run out. Pak Lah should have ordered Ahmad to sell them off and take the loss as punishment," he concluded.

Another politician who weighed in with an opinion was would-be comeback kid Datuk Seri Chua Soi Lek but he was duly lambasted by commentors on his blog.

"Some Malaysians may be nationalistic in the wrong way. We are proud of the production of the Proton but pride should not blind us to the fact where quality is concerned, Proton can never measure up to Mercedes. My Proton Perdana Executive is four years old while my personal car, Mercedes 240E is six but it gave me less problems. It is a question of value for money. Since there is substantial savings in maintenance between a Mercedes and Proton Perdana Executive in the long term, it is wiser to purchase a Mercedes. Don't be penny wise and pound foolish. We can be patriotic in many other ways," he wrote.

He also made the error of claiming that the initial outlay for a Mercedes was only RM70,000 more. Not true in this case and not true even if it were the lower-end C-Class – although it does bring up the question of why Ahmad did not go for a C200K which would have cost less and saved more on fuel.

This simply shows the obtuseness of those who make the decisions. If indeed there is a huge cost associated to the running of the Perdanas, then would not an equivalent Japanese or Korean car suffice? Only Selangor has so far hinted at purchasing a fleet of RM140,000 Toyota Camrys should replacement vehicles be required.

The purchase of the Mercs instead, led to Malaysia's top automotive blogger, Paul Tan, tellingThe Malaysian Insider that the situation "is like a child who can't take care of goldfish now being given arowanas as pets. And then later, his father tells him that he's only allowed to display the fish when important relatives drop by for visits".

That the entire affair is rife with dodgy claims and certain unfathomable leaps of logic has led to at least one conspiracy theory. With Ahmad having effectively deposed Idris as MB, one wonders if he has sought to quash a future challenge by discrediting Idris — which would explain the erroneous RM235,123.08 figure for Idris's car that was released earlier.

To highlight the previous administration's heavy expenditure, he did something bizarre himself to provoke a media circus. In this way, should it be found that the high Perdana maintenance costs were due to hanky-panky, the blame for the RM3.43 million "cost-cutting exercise" could also be laid on Idris as it would be due to his "mismanagement" that Ahmad saw it fit to purchase the Mercs.

If this were true, it would be the perfect excuse for a petrolhead to use this pun: the plan has backfired!

-TMI