Does a leopard change its spots? Dr. M wants to build another National car company!

From the star:

Malaysians have had a mixed reaction to Tun Dr Mahathir Mohamad’s announcement that the Government intends to launch a new national car company.

Speaking during a dialogue at the 24th Nikkei Conference on the Future of Asia on Monday, the Prime Minister said the new Government is thinking of starting another national car, perhaps with an Asian country such as Thailand, South Korea or Japan as a partner.

This did not go down well with everyone, with some urging for more focus on public transport.

Within minutes of the news, SK Teo created a petition titled “We should not have a national car at this point in time”, earning only five signatures out of its 100-person goal within an hour.

It's actually ludicrous to talk about ANOTHER national car project.  I mentioned before that well, Dr. M has his own ideas when it comes to economics and a country.  He thinks we should build massive things like Putrajaya.  He thinks we should build national car companies.

Maybe he has changed politically, but economically, he's sounding more and more like the old Dr. M.  And it's just more evidence that he hasn't changed and investors should be afraid. 

 

Why Dr. M believes in a national car company (in my opinion)

I've always wondered why Dr. M loves national car companies.   I mentioned that Dr. M is a numbers type of person in a previous blog on the HSR.  This means, if a project has no profit, it is a no go.  His types of projects are a very calculated movement. 

What does a National car company do for the country?  I believe his goal is hopefully for a national car company to be self-sustaining, it doesn't need to be super profitable. 

If we look at it from a foreign exchange standpoint, it achieves some goals on a purely numbers basis.  The average household spends large amounts of money in a couple of categories.  One is housing, while the next largest is autos, and another one is utilities (electricity, petrol).  Only one of these categories sees a massive negative trade balance with foreign entities, autos. 

So, if a national automaker were to be moderately successful, then Dr. M would achieve his goals of a having a more balanced trade deficit, meaning less dependence on foreign entities, and thus a stronger ringgit.  It's a very calculated idea in theory, but can it work? 

I don't really agree it can, because the products of a mediocre national car company is not what people want.  People want top quality cars at the best price, not a moderate quality national car at a bad price.  I don't think many people's goals are to have another national car company.  They want things like faster travel time, better public facilities, safer environments, better education. 

Hopefully Dr. M can have a change of heart.  They want freedom to buy what they want without being overpriced.  Right now, people are paying out the nose for better foreign cars.  And at this price point, they STILL would rather pay that ridiculous price than be forced to buy the national car.  People's wallets have spoken!