Volvo's Indomobil and PT Timor delay new cars<\/p>\n
By John Aglionby<\/p>\n
VOLVO and PT Timor Putra are two companies at opposite ends of
\nthe automotive spectrum.<\/p>\n
The former is a European heavyweight with a long history of
\nproducing safe, reliable, comfortable and respectably performing
\ncars, the second is Indonesia's national car.<\/p>\n
However, horror of horrors, believe it or not, they have
\nsomething in common. And it is something neither is particularly
\nproud of nor willing to talk freely about.<\/p>\n
Both had plans to bring new models into the Indonesian market
\nand both have had to delay their launches.<\/p>\n
Volvo, through its distributor Indomobil, was due to unveil
\nits V70 this weekend but is postponing it for reasons that are
\nnot yet clear.<\/p>\n
Senior executives were unavailable to comment this week, and a
\ncompany spokeswoman was only willing to give a vague explanation.<\/p>\n
\"We cannot say when it will be launched,\" she said.<\/p>\n
\"Managers are still discussing the details of the operation
\nand until they make their final decision, we do not know when the
\nV70 will be available in Indonesia.\"<\/p>\n
So, it is a case of having to wait and see.<\/p>\n
The V70 is by no means a guaranteed winner in the Indonesian
\nmarket -- being an estate -- although being a Volvo does mean
\nthat it has, arguably, the mother of all pedigrees when it comes
\nto wagons.<\/p>\n
More than 1,800 changes had been made to its predecessor, the
\n850, to make \"the Volvo V70 an even better estate than the 850 --
\nand the 850 was already one of the best estates on the market,\"
\nstated the company publicity.<\/p>\n
It is always hard not to take such claims with a pinch of salt
\nbut we shall just have to see how it performs on this country's
\nless than favorable roads.<\/p>\n
The versions that were due to come into Indonesia were the 10-
\nvalve, 2.0-liter model and its bigger 2.3-liter, 20-valve sibling
\nthat develops 186kW and 350Nm of torque.<\/p>\n
But more important is the question of image. No estate is seen
\nregularly on Indonesian roads apart from Mazda's 323-based
\nVantrend, and I do not yet know anyone who is completely happy
\nwith it.<\/p>\n
It will be a big challenge for the Swedish carmaker that has
\nhad substantial success with its V-line models in practically
\nevery other market it has entered.<\/p>\n
Mercedes is also looking to launch the estate version of its
\nC230 sometime in the next 12 months, which should help raise the
\nprofile of this new market segment.<\/p>\n
What is taking off though is the sport-utility sector. It is
\ngrowing more rapidly than any other and likely to continue doing
\nso for the immediate future.<\/p>\n
But Timor is going to have to wait a little longer to be part
\nof it.<\/p>\n
Earlier this year, the national car company, PT Timor Putra
\nNasional, announced it was going to launch its version of the Kia
\nSportage before the end of 1997, probably in October or November.<\/p>\n
But that is now no longer the case. Indeed PT Timor
\nDistributor Nasional (TDN) is being very coy about when it will
\nbe launched.<\/p>\n
\"We are now looking at some time in 1998,\" was all a
\nspokesperson would say, refusing to even speculate on whether it
\nwas more likely to be at the beginning of the year or nearer
\nDecember.<\/p>\n
While PT Timor Putra proudly trumpets the \"fact\" that it is
\nbecoming less dependent on its Korean partner, Kia, day by day,
\nit cannot be coincidence that the Sportage launch is being
\ndelayed at a time when Kia is in all sorts of bother.<\/p>\n
On Sept. 27, Kia Motors' union decided to strike to pressure
\nthe government to step in and rescue the ailing parent Kia Group.<\/p>\n
The following day, a Seoul Court froze all the assets and
\nliabilities of Kia Motors and two other of the 13 Kia firms that
\nfiled for special court protection the previous week to
\nreschedule debt and retain top managers.<\/p>\n
But then on Sept. 29, Kia Group's creditors declared their two
\nmonth grace period over and gave Kia Motors and the Group's other
\nautomaker, Asia Motors, \"final notice\" to file for court
\nreceivership by Tuesday.<\/p>\n
The creditors, led by Korea First Bank, rejected Kia's
\napplication for court mediation, saying such measures would not
\nhelp the company return to normal.<\/p>\n
Court receivership results in the appointment of new
\nmanagement to administer the company until stability is restored
\nor a third party decides to take over.<\/p>\n
TDN president Soemitro Soerachmad said in April the Sportage
\nwould be assembled at Timor Putra's plant in Bekasi, West Java
\nwith a local content of 40 percent.<\/p>\n
But with Kia threatening to jackknife and skid out of control,
\nit is hard to imagine where the other 60 percent will come from.<\/p>\n
And with the collapse of the rupiah, Soemitro's promise to
\nsell it for less than Rp 40 million (then US$16,600, now only
\n$12,700) is also hard to believe.<\/p>\n
But the exciting thing about the national car program is that
\none never knows what is going to happen next, so the redoubtable
\nSoemitro might just pull it off.<\/p>\n
TDN also said this week it had no immediate plans to launch a
\nversion of the Kia Sephia II (the current Timor car is based on
\nthe Sephia I), that had its world premier at the Frankfurt Motor
\nShow last month and was still pushing hard to reach its end of
\nyear sales target of 40,000 cars.<\/p>",
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