By Sudibyo M. Wiradji
\nContributor
\nJakarta<\/p>\n
Car prices remain high despite AFTA accord<\/p>\n
Under the ASEAN Free Trade Area (AFTA) agreement, Indonesia
\nand the association's other member countries are required to
\nreduce import tariffs to between zero to five percent beginning
\nthis year.<\/p>\n
Cars produced in five of the association's founding countries,
\nIndonesia, Singapore, Thailand, the Philippines and Brunei can
\nbenefit from the import tariff reduction as long as their ASEAN
\nor local content (parts) is at least 40 percent.<\/p>\n
Unlike the five other nations, Malaysia, also a founding
\nmember, pulled out of the accord until 2005 to protect its
\nnational carmaker Proton. New ASEAN member countries Vietnam,
\nLaos, Cambodia, and Myanmar are allowed to delay the opening of
\ntheir market until between 2006 and 2010.<\/p>\n
The trade accord should theoretically reduce car prices in the
\nassociation's five member countries which at present impose
\ntariffs of up to 40 percent on car imports.<\/p>\n
In Indonesia, for example, the import tariff of CBU
\n(completely built-up) cars ranges between 30 percent and 40
\npercent.<\/p>\n
Several vehicles such as Chrysler (Cherokee), Opel Zafira,
\nToyota Soluna, Toyota Altis and Honda City have met the 40
\npercent ASEAN content requirement. The prices of the vehicles
\nshould be lower than the current level, when the trade accord is
\neffectively implemented.<\/p>\n
Industrial sources said that producers could not immediately
\nreduce the prices as the AFTA agreement is only on paper. \"How
\ncould prices be reduced if the government alone still maintains
\nthe old import tariffs,\" an industry source said.<\/p>\n
Meanwhile, Japan's top automakers, including Honda, Toyota
\nMotor Corp., and Nissan Motor Co. have made a quick response to
\nthe AFTA by laying plans for the start of partial free trade in
\nASEAN, pumping in fresh investment and rolling out a fresh
\nregional strategy.<\/p>\n
For example, Honda has reportedly designated Indonesia as the
\nregional production center for its Stream MPV (Multi Purpose
\nvans). The local sales with an output at the rate of 7,000-8,000
\nunits would be exported to Thailand and other ASEAN markets.<\/p>\n
To take the advantage of AFTA, General Motors is expanding the
\nassembly facilities of its popular cars such as Zafira, Opel and
\nSubaru in the region.<\/p>\n
GM Indonesia's marketing Manager Taufik S. Arief said that
\nraising the ASEAN component is needed to ensure that the company
\nwould be able to take advantage of the larger market.<\/p>\n
\"ASEAN will become a single when AFTA is fully implemented. It
\nwill become a big market,\" he said.<\/p>\n
ASEAN, comprising 10 countries, has a huge market potential
\nwith 510 million people. China and Taiwan are two heavy
\ncompetitors in this regards as well.<\/p>\n
The Association of Indonesian Automotive Industry's (Gaikindo)
\nchairman Bambang Trisula said that the tighter competition would
\n\"force\" local car makers to boost their product quality.<\/p>\n
\"Automotive products from other countries (ASEAN) may flood
\nIndonesia and, positively, this will spur the working efficiency
\nand professionalism of local automotive manufacturers,\" he said.<\/p>\n
Taufik, however, said that if Indonesia is not ready for AFTA,
\nthen the consumers (public) may buy products offered by other
\nASEAN countries.<\/p>\n
\"For the consumers, it is not important whether the cars are
\nproduced in Indonesia or other ASEAN countries such as Thailand,
\nas long as it is cheaper and as far as the quality, reliability
\nand after-purchase service is fulfilled,\" he said.<\/p>\n
The automobile market in Indonesia is dominated by commercial
\ncars, mainly by 'minivan types, such as Toyota Kijang, Isuzu
\nPanther, Daihatsu Espass, and Daihatsu Taruna. Based on
\nGaikindo's data, car sales in 2001 reached 299,629 units,
\ncompared to 300,964 units in 2000. Of those, 88.5 percent were
\nnon-sedan types such as pick ups, minivans, minibuses, jeeps,
\nmultipurpose vehicles (MPV), sport utility vehicles (SUV), trucks
\nand buses.<\/p>\n
Toyota ranked first in the sale of passenger cars, with 12,065
\nsold followed by Honda with 6,656 units, Suzuki, with 4,558
\nunits, Hyundai with 2,960 units, BMW with 2,274 units, Timor with
\n2,102 units, Mercedes Benz with 1,694, Mitsubishi with 1,338
\nunits, Peugeot with 350 units, Audi with 223 units, Volvo with
\n132 units, KIA with 131 units, Jaguar with 110 units, Nissan with
\n91 units, Ford with 54 units, Volkswagen with 27 units, Mazda
\nwith 2 units, and Ssangyong with 1 unit.<\/p>\n
Entering the Indonesian car market are also three new
\nVolkswagen (VW) passenger models (completely built-up\/CBU)
\nincluding the 1.6 and 1.7 liter Golf. 1.8 and 2.8 Passat and the
\nnew 2.0 Beetle. After being absent for about 20 years, VW has
\nreturned to Indonesia to satisfy the demand from car enthusiasts.<\/p>\n
PT Car and Cars Indonesia (CCI), which is a sister company of
\nSingapore-based Car and Cars, handles the marketing and provides
\nthe after sales service for VW cars in Indonesia.<\/p>\n
Gaikindo said that the 2002 domestic car sales target would be
\nrevised to around 200,000 units, compared to the previous target
\nof 340,000 units.<\/p>\n
The revision was made amid persistent uncertainties in the
\ndomestic political condition. The non-sedan cars are predicted to
\ncontinue to dominate total vehicle sales in 2002 like they did in
\n2001 and 2000.<\/p>",
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