Customized vehicles to become the order of the future<\/p>\n
JAKARTA (JP): The future of product development in the
\ncountry's automotive industry has become the foremost concern of
\nmajor automakers.<\/p>\n
It is not purely about the attack of CBUs, but also the trends
\nand purchasing power of the domestic market, among other things.<\/p>\n
Agus Langgeng, chief editor of OTOMOTIF tabloid, shared his
\nviews during an interview on Monday.<\/p>\n
Question: It seems to me that local automobile producers and
\nassemblers have been slow in developing new car products. What do
\nyou think?<\/p>\n
Answer: This is because of the economic scale of the
\nIndonesian car market. The development of a new product requires
\nthe economic scale to make it viable. For Indonesia it would take
\nat least 10 years to reach the necessary economic scale to shift
\nto a new product. This means it would require 10 years to recover
\nthe investment made to produce one new vehicle product in
\nIndonesia.<\/p>\n
Launching a new car product requires a lot of work and
\ninvestment. It not only deals with the reprogramming of the
\nrobots working the assembly lines, but more than that. It takes
\nnew pressing units and more hardware work.<\/p>\n
If you see a change in vehicle designs in Indonesia every
\nyear, those are only face-lifts or minor improvements. That does
\nnot change the basics. To change the basics would take at least
\n10 years to pursue.<\/p>\n
Unlike Indonesia, producers in car-producing countries like
\nJapan and Germany need a shorter period of time to achieve the
\nnecessary economic scale because their market is the global
\nmarket. Thus, they can launch a new product in a few years and
\nthey could even produce many variants for one new product. For
\ninstance, Toyota produces six or seven series for its new
\nCorolla.<\/p>\n
Besides economic scale, what other factors slow down new
\nproduct development by local assemblers?<\/p>\n
In Indonesia, it all depends on the principals, mostly in
\nJapan.<\/p>\n
Even the popular Toyota Kijang vans, they are not the monopoly
\nof Toyota Indonesia. Toyota, as the principal, also develops
\nsimilar vans for the Philippines, India and South Africa. When
\nToyota Indonesia was preparing a new Kijang, the testing and
\nother preparatory work were conducted in Japan. And it still
\nrequired the approval from the Japanese principal to launch the
\nnew Kijang.<\/p>\n
That shows that Indonesia assemblers have no flexibility in
\nnew product development.<\/p>\n
What about the influx of imported vehicles. Do you think this
\nincrease of built-up car imports will also impact new product
\ndevelopment by local assemblers?<\/p>\n
Yes. Even now it is already hurting new product development by
\nlocal assemblers. This is just a logical consequence of business.
\nIf we talk about business, we talk about margins, not only about
\nthe quantity or number of cars sold.<\/p>\n
Selling imported luxury cars surely has a bigger margin than
\nselling mass produced vehicles such as the Kijang. When we sell
\none Toyota Lexus the margin is the same as selling 10 Kijang
\nvans.<\/p>\n
This big margin surely encourages our assemblers to join the
\nfray and import built-up cars. The local assemblers of Toyota,
\nHonda, Suzuki and others have all entered into the business of
\nimporting built-up cars. This will eventually affect their
\nactivities in new product development.<\/p>\n
In terms of numbers, the entrance of imported built-up cars
\nhas not disturbed the market of local assemblers. But in business
\nterms, it will affect the appetite of local assemblers to design
\nand introduce new products.<\/p>\n
Do you think that Indonesian car assemblers really need to
\ndevelop new products?<\/p>\n
Yes. They still need to do this.<\/p>\n
Their principals may produce products with strong reliability
\nand good design, and these vehicles can be used practically
\nanywhere in the world. But still, a local touch will give
\nsomething different to local customers.<\/p>\n
Some assemblers give a local touch to their principals' global
\nproducts by giving them local names such as Taruna and Karimun.
\nThey are not Indonesian products, but global products given
\nIndonesian names.<\/p>\n
But that's not the answer. I think Indonesia car assemblers
\nstill need to have their own team of car designers to cater to
\nthe needs of Indonesian customers.<\/p>\n
If we talk about the global car industry, what are the main
\nfactors affecting new car designs?<\/p>\n
Trends. There has been an increasing understanding among car
\nproducers in the world over the past few years that most
\ndecisions to buy cars are influenced by women. That's why, all
\nover the world, car producers employ female car designers to give
\nfemale touches to their products.<\/p>\n
When discussing design, the cubic form is identified with
\nmales, while the rounded form is identified with females. And all
\ncars are now moving toward a rounded form. Even Volvo and Jeep,
\nwhich have been so conservative in their cubic designs, are now
\nmoving toward more rounded bodies.<\/p>\n
What about in Indonesia?<\/p>\n
The female touch in car designs affects everyone in the world,
\nincluding in Indonesia. But in Indonesia there is a more
\nimportant factor affecting people's decisions to buy cars, namely
\nthe family factor.<\/p>\n
Foreigners often don't understand Indonesians. Even if a
\nfamily has only one child, they buy a Kijang van. If they have
\nmore money, with still one child, they will buy a Kia Carnival.
\nThat's funny to me. Why a Kijang or Carnival for such a small
\nfamily?<\/p>\n
Buying a larger vehicle like a Kijang will surely affect
\nefficiency, especially in the cost of fuel. A Kijang uses more
\nfuel than smaller vehicles like sedans or smaller minivans such
\nas the Hyundai Atoz. But still people here prefer a Kijang van to
\nsmaller vans.<\/p>\n
Again the consideration is family. They want to take their
\ngrandfather, grandmother, sisters, brothers, nieces and nephews
\nin one car, which is why they buy the Kijang. They don't realize
\nthat they will not take all those family members every day.<\/p>\n
But again, it's a matter of education. Our car producers have
\nnever spent any money educating their consumers about buying
\ncars.<\/p>\n
What will be the future of car designs?<\/p>\n
Car producers will be guided by competition, therefore they
\nmust provide super-satisfaction to their valued customers. The
\ntrend is that they will produce customized vehicles. For
\ninstance, when we want to buy a Mercedes, Mercedes would
\naccommodate our personal needs and demands. For instance,
\nMercedes would let us choose the car's color, any color, what
\nkind of bumpers we want, what kind of trunk we would like to have
\nand so on and so on. They could even adjust it to our budget.<\/p>\n
In Indonesia, people have started to chose customized
\nproducts. When people buy a Mercedes S-class, they can contact
\ncertain suppliers to make the vehicle more customized. So, the
\ndirection and trend toward customized products is there. And
\nlocal car producers must anticipate that.<\/p>\n
Basically, customized services are to serve the egos of the
\npeople. It's very natural that people want to look different. OK,
\nI have a Kijang but my Kijang should be different from the Kijang
\ndown the street. Astra International should be able to provide
\nsuch customized services.<\/p>\n
Mass products will remain. But customized products should not
\nbe neglected and should be treated with care because the market
\nwill expand quickly, and again the margin is larger. (Riyadi
\nSuparno)<\/p>",
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