Automomakers announce plans to raise prices<\/p>\n
Abdul Khalik, The Jakarta Post, Jakarta<\/p>\n
The country's automotive companies will increase the prices of
\ntheir car and motorcycle products due to soaring steel prices in
\nabout five to six months from now after existing stocks have been
\nsold out.<\/p>\n
Gunadi Sindhuwinata, a director at the Indomobil Group, said
\non Monday that the company's car prices would increase by more
\nthan 20 percent, while motorcycle prices could go up by at least
\n18 percent starting in August.<\/p>\n
"It will take about one semester to sell the existing stocks.
\nAfter that, car prices will ultimately be raised. However, the
\nproducers must also consider the limited purchasing power of
\nIndonesian consumers," said Gunadi, who is also the vice
\npresident of the Indonesian Motorcycle Industry Association
\n(Aisi).<\/p>\n
He told The Jakarta Post that depending on the amount of units
\ncurrently in stock, each producer would have a different strategy
\non how much they would increase the prices or whether they would
\nspread the increase over several months.<\/p>\n
Gunadi added that the prices of cars and motorcycles had to be
\nadjusted because the increase in steel prices, especially hot
\nrolled coil (HRC) and cold rolled coil (CRC).<\/p>\n
Worldwide steel shortages due to strong demand from the fast
\ngrowing economy of China and reconstruction in Iraq have caused
\nglobal prices of steel to more than double to an average of
\nUS$630 per ton from $310 in December last year.<\/p>\n
The international price of HRC has increased by 93 percent to
\n$580 per ton from $300 last year while that of CRC has increased
\nby 46 percent to $630 per ton from $430.<\/p>\n
The domestic price of HRC now stands at about Rp 5,000 (58
\nU.S. cents) per kilogram, up 53 percent from Rp 3,250 last year.
\nThe price of CRC has reached Rp 6,000 per kilogram, up 33 percent
\nfrom Rp 4,500 last year.<\/p>\n
Around 70 percent to 80 percent of car components are made of
\nsteel while motorcycles contain around 60 to 65 percent. The
\nremaining materials are plastic, rubber, aluminum, tin and
\ncopper.<\/p>\n
"All of these additional materials have also experienced
\nincreases -- by an average of 25 percent. Don't forget that the
\nprices of moulding equipment have also risen recently," said
\nGunadi.<\/p>\n
Indomobil produces and distributes various brands, such as
\nSuzuki, Volvo, Audi, Mazda, Renault and Nissan.<\/p>\n
The chairman of the Indonesian Automotive Manufacturers
\nAssociation (Gaikindo), Bambang Trisulo, concurred with Gunadi,
\nsaying that the industry would not adjust the prices until at
\nleast five months from now.<\/p>\n
"The increases will vary, depending on the types of the cars
\nand each company's policy. We hope that the increase will not be
\ntoo high," said Bambang, who is also one of the directors at the
\nAstra Group, the leader in the Indonesian car market.<\/p>\n
Friedel Engisch, the president of DaimlerChrysler Indonesia,
\nand producer of Mercedes-Benz vehicles, said that he planned to
\nraise prices in about five or six months.<\/p>\n
"Most of our cars are completely knocked down from abroad so
\nwe are less influenced by the current steel price increase. The
\npressure to raise prices is unavoidable after five to six months
\nbut we plan to raise prices by just 1 percent," Engisch told the
\nPost.<\/p>",
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