One of the messages this site insists on spreading is that "Buying NEW car is the BIGGEST killer to a Malaysian Personal Finance". Today lets look at this at national level.
One of the hottest money topics in Malaysia now is PKFZ where RM 12 billions people's money has gone 'somewhere' that you and I have no business in. And we are going to compare that with the cars you and I bought some years ago, recently and even soon again.
641 out of 1,000 Malaysian own a car. Rank #3 in the world ( USA is #1 ofcourse ). Can you imagine a developing country aka NOT a Developed nation, rank #3 as the top car owners in the whole wide world !? If car ownership by land size is a benchmark, Malaysia would have already been a Super Nation !!
In Malaysia, when you pay RM 100,000 for a new car, RM 55,000 goes to the car. The rest of the 45% goes to 'somewhere' you and I have no business in. Below show some examples of different car prices in USA and Malaysia;
Hyundai Elantra costs about USD 12,000 in Lexington and MYR 96,000 in Kuala Lumpur
Honda Civic costs about USD 15,000 in Pittsburgh and MYR 113,000 in Malaysia
Toyota Camry costs about USD 20,000 in New York and MYR 150,000 in Malaysia
Use exchange rate USD 1 = MYR 3.5, you may get these numbers in comparison;
Car 1 : MYR 42,000 in USA vs MYR 96,000 in Malaysia ( overpay 56% )
Car 2 : MYR 52,000 in USA vs MYR 113,000 in Malaysia ( overpay 54% )
Car 3 : MYR 70,000 in USA vs MYR 150,000 in Malaysia ( overpay 53% )
Although most of the times you may find Malaysia car price is more than 2X the foreign car price, but some costs and fees are legitimate so trust me for now that only 45% has gone 'missing', not the 50+%.
Malaysia has a population of 25 millions people, that means there are 16 millions cars have been purchased. ( 25 millions/ 1,000 x 641 = 16 millions ).
Takes average car price at RM 50,000 ( actual figure is RM 68,XXX), then there are a total of RM 800,000 millions car sold. ( 50,000 x 16 million = 800,000 millions )
45% goes to 'somewhere' you and I have no business in, that is a total of RM 360,000 millions or RM 360 billions.
How much have we lost in PKFZ again ? RM 12 billions !
Game Over ! The result is :
RM 12 billions vs RM 360 billions
Yet everyone buy cars, made someone else rich and NO major news reporting this fundamental flaw. Ever heard of Slow Boil Frog's story ? Its happening right now right here everyday to everyone .... our daily lives ....
Lets make some sense out of this RM 360,000 millions.
16 millions of us own cars, so our car prices were to be normal all this while, Each and Everyone of us would actually get back MYR 22,500 ( 360,000 millions / 16 millions = 22,500 )
Most should know that Malaysia as a country earns money from Petroleum. In 2007, our export minus import net profit is MYR 129,000 millions. Still 50% less than all the money we 'contribute' by buying cars.
My friends always ask me why I wasn't shock when I heard the 12 billion PKFZ case. Well, I buy cars in Malaysia and that gives away 30X more than the PKFZ case ...
Other related topics