Audi seeking regional base to close gap with competitors<\/p>\n
Novan Iman Santosa, The Jakarta Post, Singapore<\/p>\n
Implementation of the ASEAN Free Trade Area (AFTA) has enticed
\nmore and more carmakers, from the low end to the premium sector
\nalike, to establish production centers here, taking advantage of
\nlow tariffs if a car is built using local components.<\/p>\n
Recently, German carmaker Audi AG has announced that it was
\nlooking for a suitable production base for the Southeast Asia
\nregion and would make the decision by the beginning of next year.
\nIt named three countries as candidates: Indonesia, Malaysia and
\nThailand.<\/p>\n
All Audi vehicles are delivered in completely-built-up (CBU)
\nform, which commands high import duties.<\/p>\n
On the other hand, two major premium German carmakers, BMW and
\nMercedes Benz, have established their local assembly plants here,
\nallowing more affordable luxury for customers.<\/p>\n
BMW, for example, assembles here most of the BMW 3- and BMW 5-
\nSeries except the BMW 330i, which is assembled in Thailand.
\nIndonesia, in return, exports its BMW 530i to Thailand.<\/p>\n
The Mercedes C-Class is also assembled here.<\/p>\n
\"At present, we have an expert team traveling a lot, having
\ndifferent talks with different people.<\/p>\n
\"We are confident that we will have the decision in the coming
\nmonths on where to produce, with which partner and in what
\nconstellation, but it is too early to officially announce
\nanything,\" said Audi AG Board member for sales and marketing
\nRalph Weyler.<\/p>\n
Weyler was speaking to a number of journalists from the
\nregion, including Indonesia, Malaysia, Singapore and South Korea,
\nduring his stopover in Singapore on Oct. 7.<\/p>\n
Thailand, however, could be the likely winner as it has better
\ninfrastructure and larger carmaker presence than Indonesia.
\nHowever, Indonesia may have the edge on Malaysia as the latter
\nhas still refused to lower import tariffs for automotive in a
\nmove apparently to protect its own car industry.<\/p>\n
Once the decision is made, it would take another year before
\nthe first car is delivered. Audi plans to concentrate on making
\nthe Audi A4 and Audi A6, Audi's \"bread and butter\".<\/p>\n
\"It is important for Audi to be competitive, not only in
\nproduct quality but also price wise, in order to compete with
\nother premium brands.<\/p>\n
\"Import taxes and other duties applied to Audi cars are
\nputting us in an uncomfortable price position. We could overcome
\nthis kind of situation if we produce locally in the ASEAN area,\"
\nsaid Weyler.<\/p>\n
He said the price of Audi cars could be reduced by up to 50
\npercent, allowing more sales.<\/p>\n
In Indonesia, Audi is handled by PT Garuda Mataram Motor which
\nmanages to sell 100 to 150 cars a year.<\/p>\n
\"The number will increase once we have set up a production
\nbase under AFTA, which would allow us to have a more competitive
\nprice,\" said Weyler.<\/p>\n
Audi needs 40 percent local content to take advantage of the
\nAFTA scheme, which allows a low import duty of 5 percent.<\/p>\n
Weyler said Audi would definitely source engines from Germany,
\nalthough other components could be procured locally.<\/p>\n
\"We will provide the tires, wheels, audio equipment and
\nprobably the seats. It depends on the supply side as well,\" he
\nsaid.<\/p>\n
Audi managed to sell 122 units as of the third quarter of this
\nyear, according to data from the Association of Indonesian
\nAutomotive Manufacturers (Gaikindo).<\/p>\n
Meanwhile, BMW has sold a hefty 1,393 units and Mercedes Benz
\n1,695 units. The Mercedes data figure, however, also includes
\nsales of commercial vehicles.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/audi-seeking-regional-base-to-close-gap-with-competitors-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}