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Wednesday, May 10, 2017

Rich man’s toys mock Malaysia’s economic crunch

Beemers and Benzes seem to litter Malaysian roads even as the nation goes through hard times.
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PETALING JAYA: Is there a way of showing the state of the economy other than through statistics and graphs?
If there’s a street-smart indicator, Malaysian roads are definitely not it.
Even as the economic downturn dominates daily conversations during a Uber ride, one cannot help but notice the latest models of high-end cars and other high-powered vehicles on our roads.
It’s an indication that the luxury automobile sector, the rich man’s Toys “R” Us, has escaped the recession unscathed.
Even as the Malaysian job sector saw some of the worst lay-offs it had seen in years, Mercedes-Benz and BMW reported record sales in 2016, the same year that the Malaysian automotive market saw a drop of about 13% in sales.
The cheapest model of these symbols of luxury is priced almost three times that of a low-cost apartment in the Klang Valley.
About 11,800 Benzes and 11,000 Beemers were sold last year, and the brisk sales look set to continue this year.
In the first three months of 2017, Mercedes Benz sold 2,945 units, 11% above the figure recorded over the same period last year.
BMW Malaysia – which also sells the Mini Cooper, which is priced anywhere between RM176,000 and RM290,000 – recorded an almost 18% increase in sales.
It was the more affordable popular cars that saw a decline in sales last year.
According to the Malaysian Automotive Association (MAA), Proton, Perodua, Honda, Toyota and Nissan all saw slumps in sales in 2016. That’s one indication of the demography of users of such cars: the average working Malaysian who needs to go from point A to point B.
One of the more affordable Mercedes-Benz models could well be the C200 Avantgarde, which costs around RM254,000. The BMW, meanwhile, starts from RM205,800 for its 318i model.
Both car sellers have come up with a variety of financial solutions, giving customers choices other than the standard hire purchase.
Under the standard hire purchase option, a buyer of the C200 Avantgarde would have to fork out a minimum 10% down payment for a seven-year repayment period, resulting in a monthly repayment of RM3,269.
But under what is called the balloon financing option, a buyer gets to pay a lower monthly repayment rate for a period of time before paying a lump sum.
Under Mercedes-Benz Malaysia’s Agility Financing scheme and BMW’s Full Circle Programme, owners pay a certain monthly repayment for a period of time. After that period, they have the option to settle the remaining amount, extend the payment tenure or return the car.
But even with these options, these cars are far beyond the reach of the majority of Malaysians, about 90% of whom earn less than RM5,000 a month. -FMT

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