Car production, sales may drop 90% in March

JAKARTA (JP): The Association of Indonesian Automotive Industries estimated yesterday that the country's economic crisis would drag down car production and sales by 90 percent this month.

The association's chairman, Herman Z. Latief, estimated sales in March would total only about 3,000 cars, about 10 percent of the 34,046 cars sold in the same month last year and less than half of last month's figure of 6,431.

Herman said domestic car production, which exceeded 40,000 vehicles a month before the crisis, was also estimated to fall by 90 percent this month from 33,560 cars in the same month last year.

"Now production must be adjusted to what can actually be sold," he said following a meeting with Minister of Industry and Trade Mohamad "Bob" Hasan.

PT Astra International president, Theodore P. Rachmat said yesterday his company's production of cars had plunged 75 percent while its production of motorcycles was down 50 percent, since the monetary crisis hit the country in early July.

Rachmat said Astra, the country's largest car company, predicted its sales would be about 60,000 cars and 500,000 motorcycles this year.

The crisis, which has cut the rupiah's value by over 70 percent against the U.S. dollar, has caused sharp increases not only in prices of cars but also their spare parts.

Spare parts

Car companies, the Association of Automotive parts and Component Industries Association (GIAMM), and cooperatives of public transportation operators, met yesterday with the industry and trade minister to facilitate a way to reduce the prices of car spare parts.

Both associations agreed yesterday to give a 30 percent discount on spare parts purchased for commercial cars used as public transportation in Jakarta. The discount would be given at cheap markets set up for the purpose.

Several car companies, including Astra Motor, Bimantara, Indomobil and Krama Yudha Tiga Berlian Motor have reportedly agreed to set up bazaars at some of Jakarta's bus major terminals, selling items such as tires, fuses, batteries, fanbelts and brake pads.

Herman said the discount was given to help public transportation drivers who could not afford to buy spare parts anymore.

Car spare parts have risen by over 100 percent due to the rupiah's free fall, sparking protests by drivers of buses and other public transportation vehicles.

"We are not in the position to give discounts now, we are almost dying ourselves, but we know the dilemma with the public transportation sector, if it is not handled soon, could get more fatal," Herman said.

GIAMM Chairman Achmad Safiun said yesterday that domestic stocks of spare parts were sufficient, and were even slightly higher then demand.

"We expected to supply at least 430,000 new cars this year, but because of the monetary crisis, it has been estimated that there would only be 100,000 new cars to supply, so that we have to return some of our materials," Safiun said. (das)