Car market battered by rupiah's free fall
Car market battered by rupiah's free fall
JAKARTA (JP): The rupiah's free fall against the U.S. dollar
has created new uncertainty among local car dealers, prompting
some to impose unfixed prices and some to halt sales activities
altogether.
Some car dealers said yesterday the roller-coaster ride of the
currency had forced them to limit their stock as well as their
sales, as the price of cars, especially those with high import
content, followed the currency closely.
"We would rather sell what we have at the store right now, but
if we have to order from a car's sole agent, the price would
depend on the day of promised delivery," said Widiarto Tanuwibawa
of PT Istana Kemakmuran Motor, an authorized Honda dealer.
"If a car's price increased by the time it was delivered, as
it does when the dollar appreciates, the buyer would have to pay
the inflated price," Widiarto told The Jakarta Post.
Since the stock of cars at his store was limited, most of the
time he could not provide a customer's request for specifications
such as color, he said.
A manager of an authorized Toyota dealership who requested
anonymity said his dealership continued to sell despite the
uncertainty. But he admitted the rupiah's sharp fluctuation had
caused problems with potential buyers.
"Some people have canceled their purchases, although they have
given a down payment, because the end price on the day of
delivery exceeds their budget," he said.
Some dealerships simply halted sales because the sharp
fluctuation caused problems for the local car agents to continue
assembling and production.
Mercedes Benz is one of the companies which has stopped
production at its local assembly line to give the market a chance
to stabilize.
Albertus, an administrative manager of Mercedes authorized
dealership PT Mercindo Perkasa, said his store and all Mercedes
dealerships had suspended the sale of all products including
sedans, trucks and jeeps.
"We have stopped selling since Dec. 22 and I don't know when
we'll begin selling again," he said.
Prior to the suspension of activity, the sale of Mercedes
commercial cars had dropped by 30 percent to 40 percent, he said,
but the sale of passenger cars was not as bad.
Other brands have also begun to stop sales activities as the
rupiah's continued fall made it hard for them to determine car
prices.
The rupiah continued to disintegrate yesterday, with no sign
of alleviation to the country's debt and confidence crisis.
The rupiah, which was only 2,400 to the dollar in early July,
plunged through 15,000 yesterday, but managed to recover to
11,800 in the afternoon.
Stop selling
A saleswoman of PT Handal Mobilindo said her store had stopped
selling BMWs since the dollar fell to Rp 11,000 last week.
"We still have cars in stock here, but we cannot determine
their price if the rupiah still fluctuates wildly like this,"
Henny said.
The Toyota dealership's manager said his store could not meet
the demand for some cars, because some automakers were no longer
producing cars.
"For example, the demand for Land Cruisers has actually been
pretty good, but we cannot provide the product," he said.
The same thing had happened with other products, such as
automatic or diesel-fueled Toyota Kijangs, he said.
All the car dealers agreed the currency crisis had largely cut
their sales.
Widiarto said the sale of Hondas had dropped by between 40
percent and 50 percent since December, partly due to increasing
prices. The price of the Honda Cielo Accord sedan, for example,
had jumped to Rp 131 million (US$10,916) from Rp 107 million in
December, he said.
Henny said sales at her store, including of the Daihatsu
Feroza, Suzuki Escudo and Isuzu Panther, dropped by about 50
percent. She said an Isuzu Panther was selling for Rp 66 million
yesterday, a drastic leap from Rp 59.2 million the day before.
The sale of Toyotas, including the widely popular Kijang,
dropped by an average of 60 percent to 70 percent.
"I think all dealers are suffering, but we cannot stop selling
because that is how we make our living," one dealer said.
Meanwhile, PT Timor Distributor Nasional announced yesterday a
30.77 percent increase in the price of its Timor sedan following
the government's move to abolish all tax privileges given to the
so-called national car producer.
The company said that the prices were increased partly due to
the severe monetary crisis, not just because of the scrapping of
the tax exemptions.
The new price of its SOHC model (off the road) in a solid
color is Rp 44.25 million (US$3,700) and in a metallic color Rp
44.75 million.
The DOHC model (off the road) in a solid color is now Rp 51
million and Rp 51.5 million for a metallic colored vehicle.
(das/gis)