Mercedes-Benz prices set to rise as production restarts<\/p>\n
By John Aglionby<\/p>\n
There's good news and there's bad news this week, as far as
\nanyone wanting to buy a Mercedes-Benz as a generous Valentine's
\nDay present is concerned.<\/p>\n
The good news is that the Indonesian sole agent of the German
\nautomotive giant, PT Star Motors Indonesia, has ended its six-
\nweek-long production \"holiday\" and is manufacturing again, albeit
\nat only 60 percent of precrisis volume.<\/p>\n
The bad news is that when cars go back on sale on Monday the
\nprices will have jumped significantly, although the specifics
\nwill not be announced until first thing Monday morning.<\/p>\n
\"We ourselves are still not sure how much prices will increase
\nby,\" said marketing director Friedel Engisch. \"We are having a
\nvisit by a board member (from Germany) this week to discuss it
\nand we will announce it first thing on Monday.\"<\/p>\n
Engisch said the increase would be in line with those of other
\nluxury car manufacturers which is anywhere between 10 percent and
\n20 percent.<\/p>\n
This would mean the C230 Elegance, one of Mercedes cheaper
\nmodels, would rise to about Rp 200 million (US$27,800) and the
\nE320 V6 Elegance double that at about Rp 400 million. These are
\nboth off-the-road prices.<\/p>\n
Star Motors says that one should add between 20 percent and 30
\npercent to get the on-the-road cost.<\/p>\n
Engisch said that only a few models, such as the 200 series,
\nhad been discontinued and that some new ones would be added,
\nincluding the much-awaited CLK.<\/p>\n
\"It was always our plan to bring the CLK to Indonesia this
\nyear and we still intend to do so, although we do not know when
\nyet,\" he said. \"You have to bring in the eye-catchers. After all,
\nwhy buy another S-Class when you already have three in the
\ngarage; you want something different.\"<\/p>\n
The company plans to run at reduced production levels for the
\nfirst six months of the year and then reassess the second
\nsituation for the rest of 1998. \"We trying to be prepared to be
\nas flexible as possible, but we will have to just wait and see,\"
\nEngisch said.<\/p>\n
Star Motors has not laid off any workers yet but is not
\nactively recruiting anyone or filling vacancies left by employees
\nretiring.<\/p>\n
However the company's prospects are good, Engisch said. \"The
\ndecision to stop production over Christmas and Lebaran was a very
\ngood one. It reduced our losses and meant we ended the year with
\na very healthy profit.\" This would be reinvested back into the
\ncompany to develop new models.<\/p>\n
The rupiah's collapse has also prompted Star Motors to
\nreadjust its export ambitions for its MB800 truck and MBO 800 bus
\nchassis, upward.<\/p>\n
\"We already have fixed orders for 1,500 units and are looking
\nto increase this,\" Engisch said, adding that he was soon going to
\nEgypt with the aim of securing orders for up to another 500
\nvehicles, which have a local content of just over 30 percent.<\/p>\n
He also said even more trucks could be exported -- and thus
\nmore dollars brought into the country -- if the government both
\ncut back on import duty and granted export incentive facilities,
\nas South Africa did to stimulate its economy.<\/p>",
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