2001: Glittering or gloomy?<\/p>\n
By Soeryo Winoto<\/p>\n
If the government succeeds in fulfilling its 2001 target to
\nmake the rupiah stronger against U.S. dollar -- Rp 8,500 per US$1
\n-- the domestic market for cars will bloom, meaning that more
\npeople will enjoy quality cars. Association of Indonesian
\nAutomotive Industries (Gaikindo) chairman, Bambang Trisulo,
\nsaid. "We expect at least 300,000 cars to be sold this year."<\/p>\n
JAKARTA (JP): But if the rupiah remains weak against the
\ngreenback, such as Rp 9,500 to $1, and the political situation
\nand security are uncertain, the local market will likely be a
\nlittle gloomy.<\/p>\n
"But we expect that 270,000 cars will be sold," Bambang said.<\/p>\n
According to PT Astra's director, Nissan Diesel, the estimated
\nfigures did not include 15,000 cars imported by companies which
\nare not under the auspice of Gaikindo.<\/p>\n
Despite the (still) economic gloom of last year, data from
\nGaikindo indicates that 275,000 cars were sold up until November.<\/p>\n
The figures sparked optimism and competition among authorized
\nagents. PT Toyota Astra Motor had to increase production of
\nKijang vans and Soluna sedans last year to answer the unexpected
\ndemand.<\/p>\n
Until July 2000 more than 35,000 Kijang vans had been sold.<\/p>\n
Suzuki producer, Indomobil Group, has also worked hard to
\nproduce 5,000 cars to meet consumer demand.<\/p>\n
Bambang said the car market had been be cheered by "new
\nplayers". "Korea is entering the market, and China may follow
\nwith its own products, while the old players will push their
\nlatest products."<\/p>\n
Despite car producers' optimism, many people say the good
\nsales (during the first half of 2000) happened because people had
\ndelayed their plan to purchase cars in the previous year due to
\nsecurity reasons.<\/p>\n
According to automotive observer Suhari Sargo, this year, the
\nmarket would not be better than last year. "The country's economy
\nwill not be better this year, while the income per capita is
\nstill low, about $600."<\/p>\n
Suhari said income per capita and economic growth are the keys
\nto car sales, citing that an average of 360,000 cars were sold in
\nMalaysia, where the income per capita was $2,000.<\/p>\n
Thailand was a little below Malaysia. About 340,000 cars were
\nsold in Thailand, where the income per capita was $1,500.<\/p>\n
"Security will also matter in vehicle sales. If security is
\nnot guaranteed, people will be reluctant and discouraged from
\nbuying new cars," he said.<\/p>\n
Street demonstrations and vandalism have haunted most drivers
\nin major Indonesian cities for the past three years. People,
\nincluding demonstrators, have been easily provoked to commit
\nanarchy, such as destroying any vehicles passing on the street.<\/p>\n
Suhari added that delayed orders last year's should not be
\nrecorded as this year's sales, referring to last year's carryover
\nof a total of 30,000 cars.<\/p>\n
"Car distributors must also be extra careful. They should not
\nbe too vigorous in offering their products. Remember that,
\npractically, people will be working actively only for 10 months
\nthis year. Half of this month (January) has been virtually lost,
\nwhat with the Islamic Idul Fitri and Christian Christmas holidays
\nfalling within days of each other in December 2000. Market
\nactivities will be very slow," Suhari said.<\/p>\n
Taxation<\/p>\n
The government's decision to increase sales tax on luxurious
\ngoods (PPnBM) (to between 30 percent and 75 percent of prices) is
\nfeared to upset the automotive market this year.<\/p>\n
Director general of metal industry, machinery, electronics,
\nand miscellaneous industries, Agus Tjahayana, said at a media
\nconference recently that the car market, which has shown a little
\nprogress, should not be discouraged by the policy.<\/p>\n
Bambang and Suhari also expressed their worry that the tax
\nwould trigger an increase in car prices.<\/p>\n
"The market has not been so bright that increasing car prices
\nwill be unfortunate. Carmakers need to be extra careful before
\nsetting new prices for their products," Bambang said.<\/p>\n
Suhari said the government should have targeted luxurious cars
\nto collect more money from taxes, instead of increasing the PPnBM
\nfor its revenues. "The import duty for high-end cars could be
\nincreased from just (the current) 80 percent."<\/p>\n
The government of Malaysia imposes 400 percent import duty for
\nluxury completely built up (CBU) cars, he said.<\/p>\n
According to the new regulation, the sales tax for a new sedan
\nof between 3,000cc and 4,000cc is 50 percent and for over
\n4,000cc, 75 percent.<\/p>\n
The old regulations ruled that a sedan with an engine capacity
\nof more than 3,000cc was charged 50 percent in sales tax.<\/p>\n
The sales tax for double-axle passenger vans did not change,
\nbeing between 30 percent and 40 percent.<\/p>\n
There was no explanation as to why the government increased
\nthe sales tax, or what types of car are classified as luxury.<\/p>\n
PT Indomobil's managing director, Gunadi Sindhuwinata, said a
\na clear definition was needed of a luxury car. "If the category
\ndepends on engine capacity (cc), the new ruling is not fair.
\nBecause there are cars with a big engine capacity but which
\ncannot be classified as a luxury car."<\/p>\n
Trend<\/p>\n
Many have predicted that Toyota's Kijang van continue to lead
\nthe local market this year.<\/p>\n
Both Bambang and Suhari agreed.<\/p>\n
"Some 60 percent or 70 percent of all cars sold this year will
\nbe such a family van," Bambang said. "The prices are relatively
\nreasonable for the middle to lower classes, as most of the vans
\nof this type are produced locally."<\/p>\n
Besides Kijang, there are other Toyota sports utility vans
\n(SUV) Prado, Land Cruiser 100, Previa, ready to hit the market.<\/p>\n
Jakarta-based DaimlerChrysler's corporate communications head,
\nWim Ekel, said that his company would also enhance locally
\nassembled vehicles. "People are usually interested in the
\nexisting types of vehicles available on the market. Locally
\nassembled vehicles are as superior as those produced in their
\ncountry of origin, and are cheaper."<\/p>\n
Suhari said that Indonesia's "extended family" culture also
\ninfluenced people in buying a multipurpose van (MPV).<\/p>\n
"Yes, about 70 percent of products sold will be family vans
\nlike Kijang. There will be no other choice. Fifteen percent will
\nbe sedans and the rest will be trucks and other types of cars."<\/p>\n
He said that the government's plan to increase fuel prices
\nwould not discourage people from buying a second car.<\/p>\n
"Diesel-fueled cars are more economic. But, no doubt, comfort
\nand performance are usually taken into consideration by
\nconsumers," Suhari said.<\/p>\n
The CBU car business will not be bad, as car producers have
\nalso been competing in offering family cars.<\/p>\n
Korea enjoyed sales of 3,826 imported KIA Carnival MPVs in the
\nfirst half 2000. KIA is predicted to be a good seller this year.<\/p>\n
KIA's Carnival good selling may also have lured big guns like
\nFord and DaimlerChrysler.<\/p>\n
Ford, which controls Volvo, Land Rover, Jaguar, Aston Martin,
\nLincoln, Mercury and Mazda, will likely depend on its Escape XLT
\nSUV to compete in the Indonesian market this year.<\/p>\n
Observers have said the Ford Explorer SUV would also attract
\nIndonesian car lovers.<\/p>\n
DaimlerChrysler, which has 18 products, including Mercedes
\nBenz, Chrysler, Jeep and Dodge, will rely on its new C-Class
\nMercedes Benz sedan during the 2001 market race here.<\/p>\n
The new C-Class, launched in the spring of 2000, is extremely
\npopular with customers worldwide. More than 150,000 vehicles of
\nthis series were delivered to customers in the first year of
\nproduction.<\/p>\n
Now that the government has lifted the ban on imports of CBU
\nluxury cars with engine capacities exceeding 4,000cc, demand for
\nluxury vehicles, mostly CBUs, has increased.<\/p>\n
An abundant variety of vehicles will jostle for places in the
\nIndonesian market.<\/p>\n
"That will be okay. It doesn't matter. We are educating
\nconsumers, who are becoming aware of the best products. Dealing
\nwith DaimlerChrysler is dealing with an established organization,
\nwhich has reliable dealers," said Wim.<\/p>\n
Last year, 2,250 passenger cars and 1,400 commercial vehicles
\nwere sold in Indonesia, Wim said.<\/p>\n
Expressing his optimism, Ford president of ASEAN operations,
\nGerald J. Kania, once said that Indonesia was still a promising
\nmarket.<\/p>\n
A Jakarta-based representative official has been appointed by
\nFord, and dealers and distributors will be named in its effort to
\nreenter the Indonesian market.<\/p>\n
Commenting on Ford's plan, Bambang Trisulo welcomed it, saying
\nthat rushing to build its own assembling plants might be
\nunnecessary for Ford. "The more players the better. Ford could
\ncooperate with local partners (the ones it had cooperated with in
\nthe past) to assemble its vehicles, regardless of its interest to
\nexport its CBU cars."<\/p>\n
Ford cooperated with local distributor Indonesian Republic
\nMotor Company for almost one year in the 1990s. The cooperation
\nhalted after a year as the automotive policy made by the New
\nOrder government hindered Ford, when the Timor brand car was the
\nprima donna.<\/p>",
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