Astra spins off spare-parts division

JAKARTA (JP): Publicly listed car manufacturer PT Astra International has transferred its Aspira automotive spare-parts division to its subsidiary in a bid to boost efficiency.

Astra International's publicly listed subsidiary PT Astra Otoparts said on Wednesday that taking over the Aspira division was part of enhancing Astra International's overall performance.

"Astra International is hoping to become more flexible and efficient by transferring Aspira to us," Astra Otopart president Budi S. Pranoto said in a press meeting.

The Aspira division produces alternative brands for automotive and motorcycle spare parts under the brand name Aspira. Astra Otoparts produces the more expensive genuine spare parts.

Budi said that Astra International relinquished its Aspira spare part division in July this year, emphasizing that the transfer was not an acquisition.

In acquiring Aspira's inventory, he said, Astra Otoparts paid Astra International Rp 30 billion.

"The expertise (of making spare parts) lies with us," he said of the transfer of Aspira to Astra Otopart.

According to him, Aspira would offer equal quality to Astra Otoparts' products, despite its lower prices.

"Astra Otoparts believes that not all vehicle owners are willing to spend more money on genuine parts. About 77 percent vehicle owners are using alternative parts," he said without elaborating Aspira and Astra Otopart's current market share.

Aspira, Budi said, is expected to contribute about 20.8 percent of Astra Otopart's sales revenue, or some Rp 210.66 billion (US$23 million) within this year's second semester.

He also assured that Aspira prices would remain low despite the take over.

"Better still, fluctuation in the rupiah will not affect our pricing policy thanks to the low import content," Budi added.

He explained that more than 81 percent of Aspira's product components were of local content.

He said his company was planning to invest another Rp 30 billion in expansion plans should business prospects permit.

"We expect growth of 112 percent over the next five years with a minimum annual growth of 15 percent," he predicted.

Aspira sells its products across the country through 84 dealers, 59 suppliers and over 2,000 stores for motorcycles and 600 stores for automotive spare parts.

The company further planned to expand Aspira's market from local oriented to export oriented, he said.

He said Astra Otoparts was exporting to 52 countries with main markets located in the Middle East and Asia.(bkm)