Sedan market: Tough but it is still workable<\/p>\n
Rudijanto, Contributor, Jakarta<\/p>\n
With their continuous surge in sales here, multipurpose
\nvehicles (MPVs) are expected to grab a larger market share this
\nyear. Surprisingly the market for sedans has also started to look
\npromising, as more Indonesians opt for features that optimize
\ncomfort for their in or out-of-town mobility.<\/p>\n
The dominance of MPVs was reflected early this year when the
\nsales of MPVs, mostly two-wheel-drive versions, reached 7,103
\nunits, as compared to 1,901 sedans (below 1,500 cc) during the
\nsame period of last year. Sedans with higher cc -- up to 2,500 cc
\n-- had a lower sales figure of 947 units.<\/p>\n
In spite of the sales imbalance between the two types of
\nvehicles, the Association of Indonesian Automotive Manufacturers
\n(Gaikindo) predicted last year brighter prospects in the very
\nnear future for 1,500 cc sedans.<\/p>\n
This prediction came true not long afterward. The positive
\nsign for the sedan market was reflected in the January 2004 sales
\nof small sedans, namely Honda City, Hyundai Accent, Suzuki Baleno
\nand Toyota Vios\/Soluna that totaled 1905 units -- more than
\ndouble the 902 units sold in the same period of last year.<\/p>\n
The sales of medium-sized sedans with 1800 cc engines also
\nstrengthened in February, with a significant increase led by
\nToyota Corolla Altis. From 213 in January, Altis' sales also more
\nthan doubled to 441 units in February.<\/p>\n
Though other sedans in the 1800-cc class recorded lower sales
\nfigures in the same month, Altis' success is deemed to be a spark
\nof hope for this segment. Meanwhile, according to Gaikindo's
\nforecast, total car sales of all types for this year will reach
\n380,000 units. This means a steady growth over the past three
\nyears from 317,763 units sold in 2002. Last year saw total sales
\nof 354,482 cars.<\/p>\n
In the premium sedan market, a positive market signal was
\nshown by a 15 percent increase in sales of BMW cars, from 129 in
\nJanuary 2004 to 148 in February 2004. Traditionally, the premium
\nsedan market here has been relatively stable, with approximately
\n4,500-5,000 units sold per year.<\/p>\n
Optimism is currently at an all-time high, especially after
\nthe peaceful general election this month. Car sales in March also
\nshowed encouraging signs as sales increased by 16 percent to
\n39,286 units, from 33,971 units in February.<\/p>\n
Another prediction by Gaikindo is that 75 percent of the total
\nmarket will be enjoyed by MPVs and small sedans this year. Hence,
\nmanufacturers and distributors of bigger sedans have to work
\nharder to increase sales, or at least maintain the current
\nhealthy level.<\/p>\n
General Motors Indonesia's director of sales and marketing
\nAntonio Zara also thinks that the sedan market here may decline
\nthis year. However, the chances of smaller sedans, like the 1500
\ncc type, are better as they have so far outsold their larger
\ncounterparts.<\/p>\n
\"Before the economic crisis hit the country in 1997, naturally
\nbigger sedans were preferred, but, today, out of four or five
\ncars sold you will find that at least three or even more are 1500
\ncc sedans,\" said Zara.<\/p>\n
The current record sales enjoyed by MPVs are surprising today,
\nwhile yesterday's sedan manufacturers would never have dreamed of
\nsuch success. Most car producers are of the opinion that the
\ngovernment's regulations are discriminating, especially in the
\napplication of higher luxury tax for sedans.<\/p>\n
\"In all fairness, we, manufacturers, suggest equal treatment
\nin the application of luxury tax. We propose that we adhere to
\nthe concept of luxury tax itself, which means higher taxation for
\nmore luxurious items,\" said Zara.<\/p>\n
He revealed that certain expensive cars, such as Honda CRV,
\nare taxed less than the lower-priced Honda City simply because
\nthe latter is a sedan while the former is categorized as a Sports
\nUtility Vehicle (SUV). According to Zara, the policy reflects an
\ninconsistency with the true concept of luxury tax.<\/p>\n
Gaikindo chairman Bambang Trisulo also expressed the
\nassociations's concerns over the implementation of luxury tax. He
\nunderstood why several authorized importing agents (ATPMs) had
\nrequested the government to lower the luxury tax for sedans with
\nless than 2000 cc. Indeed, Bisnis Indonesia quoted him as saying
\nthat this was probably why the growth of the sedan market here
\nhas lagged behind that of the MPV market.<\/p>\n
If the luxury tax policy remains unchanged, players in the
\nsedan market will have to wrack their brains to come up with an
\nimaginative way to compete in this comparatively smaller segment.
\nWith sales figures of sedans constituting only a fraction of
\ntotal car sales, manufacturers and distributors alike cannot do
\nmuch but envy the success enjoyed by MPVs and even some SUVs.<\/p>\n
To highlight his point, Zara said that GM is targeting an
\noverall growth of between 30 percent and 50 percent this year,
\nwhile keeping a less-than-15-percent estimate for growth in the
\ncompany's sedan sales. Likewise, PT Hyundai Mobil Indonesia is
\ntargeting to sell between 12,000 and 13,000 cars this year, while
\nthe sales target for its New Accent sedan is merely about 15
\npercent of the total figure.<\/p>\n
Albeit small in percentage, some sedan brands still attract
\nthose who prefer convenience and comfort in driving. While
\npreviously perceived as expensive cars, the current prices of
\ncertain small sedans are even lower than those of MPVs and SUVs.
\nThese affordable price tags have apparently boosted the sales of
\nsmall sedans, mostly in the range of 1500 cc.<\/p>\n
\"Driving a sedan is certainly worlds apart from the experience
\nof driving an MPV, because sedans have better suspension and they
\nlook elegant. These are some of the reasons why people still buy
\nsedans,\" said Hyundai's Event and PR department head Lindarto
\nRahardjo.<\/p>\n
Hyundai has various reasons to be proud of its 1500-cc New
\nAccent sedan and its 1300-cc Getz. New Accent is the latest
\nvariant of Hyundai Verna. Aimed at young professionals and
\nexecutives, it comes with a more aerodynamic, solid, compact and
\nelegant look than its predecessor.<\/p>\n
\"We are able to sell 200 units of New Accent per month and
\nbetween 200 and 250 units of Getz per month. That is good enough
\nfor a newcomer to this market like us,\" said Rahardjo.<\/p>\n
While Korean carmakers are penetrating the market, long-
\nestablished players, like Honda, cannot stay put to safeguard
\ntheir market shares. Last month, Honda launched its New Civic
\n2004.<\/p>\n
Coming with a more elegant, luxurious look -- as well as a
\nsporty interior -- compared to its predecessor, the 1.7-liter-
\nengine New Civic 2004 is expected to record similar success.
\nHonda sold 9,967 sedans, including the Honda Civic last year.<\/p>\n
The New Civic 2004 is available in five colors: Silverstone
\nmetallic, Satin silver metallic, Nighthawk black pearl, Satellite
\nsilver metallic and Heart red mica metallic. Honda Civic's sales
\ngrew by 16 percent in 2002 and further grew in 2003, by 19
\npercent.<\/p>\n
GM is still relying on its Optra in the sedan segment. Powered
\nby a 1800 cc engine that promises maximum efficiency and high
\nspeed, as well as a luxurious interior with the Total Noise
\nResistance (TNR) system, Optra is also targeted at professionals
\nand executives.<\/p>\n
Meanwhile, in the premium sedan segment, BMW has expanded its
\nBMW 7 series by introducing the 730 Li in February. BMW also
\nlaunched the face-lift of its popular X5 model in early march
\n2004.<\/p>\n
Expecting the success of its 3 series, the company also
\nintroduced a new variant of 325i. Last year, BMW sold 2.149
\nunits, taking a 45-percent share of the luxury car segment in<\/p>\n
Another premium car producer, Daimler Chrysler, is also
\nboosting the sales of the Mercedes Benz E-Class. Aside from the
\nE-Class, other existing models on the market include the C and S
\nclasses.<\/p>\n
With the various brands launched, both in the small and luxury
\nsedan segments -- as well as the impressive efforts by
\nmanufacturers to lure customers -- it may be concluded that the
\nfuture of sedans here is not so bleak after all.<\/p>",
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