Automotive sales may fall to 50,000 vehicles

JAKARTA (JP): Indonesia's automotive sales may decline further to 50,000 cars this year from 58,000 cars last year, as demand remains low in the crisis-hit country, a noted automotive company executive has said.

Herman Z. Latief, the president of PT Krama Yudha Tiga Berlian Motors, said on Monday the car market would remain depressed despite expected improvement in the country's economy in the second half of 1999.

"The country's economic crisis and political instability are the main contributors to the further fall in automotive vehicle sales," he said at a launch of the Mitsubishi Kuda family van.

"It is possible that the country's automotive market is the worst affected in the region by the crisis," he said.

Prior to the crisis, Latief said the country's automotive market had shown impressive growth, with annual sales of 400,000 vehicles of various makes.

Sales dropped to 58,000 units in 1998 as the economic crisis, which began in the middle of 1997, became more severe and the country's political situation became tenuous following the downfall of former president Soeharto.

"If the prediction comes true, Indonesia will, for the first time in the country's automotive history, record lower sales than Singapore, which records 60,000 units annually," Latief said.

He said the Indonesia situation differed from automotive markets in other Asian countries, in which there was a tendency for the market to follow a country's economic recovery.

Latief said he was still optimistic about the long-term outlook for the country's automotive market, citing Indonesia's vast territory and large population.

He said Krama Yudha launched the multipurpose family van Mitsubishi Kuda, to show its commitment to the domestic market, despite the economic crisis.

The company's principal, Mitsubishi Motors in Japan, has developed the car in three countries -- Taiwan, Indonesia and the Philippines -- under the "complementation parts" scheme for efficiency.

The Kuda car has 40 percent local content and 60 percent imported content.

Off-road prices are Rp 110 million (US$12,200) for the Super Exceed type, Rp 105 million for the GLS type, and Rp 92 million for the GLX type. (jsk)