Carmakers face stiff competition in every class

Burhanuddin Abe, Contributor, Jakarta

Competition between car makers is accelerating as seen at the Gaikindo Auto Expo 2005, which was held in Senayan, Jakarta from July 8 to July 17.

Automobiles in various categories, including sedans, compact sedans, SUVs (Sport Utility Vehicles) and MPV (Multi-Purpose Vehicles) were on display at the expo.

At least 140 companies took part in the expo, with 28 of them being trademark holder sole agents (ATPMs).

As the most prestigious automobile expo in the country, Gaikindo's expo was like looking at the national automotive industry landscape in miniature. The population's ambition to own new cars is so great that the government's statement that it would enforce a progressive tax rate on automobiles and limit the sale of cars in the fuel efficiency drive paled in insignificance as automobile transactions at the expo surged to Rp 1 trillion in just nine days.

Indeed, car sales have continued to increase following the higher economic growth rate. While in the post-monetary-crisis year of 1999, just over 100,000 cars were sold, the year 2000 showed an increase to 308,805 cars. The figure is expected to continue to rise in the next three years: 317,791 cars in 2002, 354,409 cars in 2003 and 483,169 cars in 2004.

The Indonesian Association of Automotive Manufacturers (Gaikindo) chairman Bambang Trisulo predicted that if the country's political and security situations remained conducive to business, sales of new automobiles in late 2005 could reach 480,000 to 500,000 units.

The increase will also be contributed to by the launch of mini automobiles, which are sold for between Rp 100 million and Rp 150 million per unit. "Mini automobiles have greatly stimulated the national automotive market and have significantly jacked up market growth this year. The market shows a great demand for these cars. That's why all manufacturers like Toyota, Suzuki and Mitsubishi, have brought out cars in this category," he said.

This optimism is quite natural, especially given the fact that automotive producers like Suzuki, Toyota, Mitsubishi and Daihatsu, in their positions as the principals of ATPMs, have now controlled the majority shares of these agents. This practice has raised production volume. Bigger investment will be made to meet market demand while automobile designs will cater to the taste prevailing in the domestic and global markets. Another important factor is that the selling prices will also be made more competitive.

Fortuner, an SUV Urban, may be singled out as an example of a successfully marketed automobile with a unique design and a maximum capacity sold at a very competitive price. This car, which is a variant of IMV 4, a product of Innovative International Multi-Purpose Vehicle (IMV), a Toyota global project, is now officially marketed in Indonesia. The presence of this car will push the SUV market in this country to break the upper sales threshold of 35,000 units in 2005.

"Our target is to sell about 500 Fortuner automobiles a month this year," said PT Toyota-Astra Motor's (ATM) president director Johnny Darmawan.

There is indeed a strong reason for Johnny's optimism. Fortuner represents today's trend of an urban SUV design concept. This automobile, whose very low coefficient of resistance enables it to be more aerodynamic in appearance, is sold at an on the road price of between Rp 295 million ( 2.7 V G A/T 4x2 type) and Rp 353 million (2.7V A/T 4x4 type).

The launch of Fortuner on July 8 here was a surprise because the mid SUV market has been dominated by Nissan X-trail and Honda CRV these years. Nissan X-Trail is provided with a 2.5 liter (2,488 cc), 4-collinear-cylinder, double overhead camshaft (DOHC), 16-valve (four valves per cylinder) engine as well as a continuous variable valve timing control (CVTC). Honda CRV, meanwhile, has a 2.4-liter, 4-collinear-cylinder, DOHC 16-valve engine, completed with an intellectual variable valve timing and a lift electronic control (i-VTEC)

Thanks to this CVTC and i-VTEC technologies, the engine will be stronger in power while still being fuel-efficient and environmentally friendly.

Throughout 2004, 6,071 CRV cars and 7,131 Nissan X-Trail automobiles were sold. This year the battle is not yet over and the outcome will not be known until late 2005 or early 2006. However, the market landscape has now changed with the presence of Fortuner. The SUV market also sees the presence of Ford Escape, Mazda Tribute, Suzuki Escudo 2.0, Suzuki Grand Escudo 2.7, KIA Sportage II, Hyundai Santa Fe and Subaru Forester.

The presence of these new SUVs shows market dynamism, especially because in the past two to three years, SUV has gained greater popularity, said Soehari Sargo, a national automotive observer.

He also noted that these SUV automobiles were introduced to the market not only in pursuit of sales but also in the context of brand image promotion. Competition is very stiff and "this is the response of market dynamism," he added.

In the premium class, you can find the darlings of automobile fans, such as Rolls-Royce, Bentley, Porsche and Jaguar. The most bitter competition is now going on between Mercedes-Benz and BMW. While Mercedes relies on its latest models (New A-Class, C Sport, CL 350 and New SLK Class 350), BMW shows of BWM Series 3 and 730Li as well as 740Li.

The attraction that these BMW of series 7 have is that their V8 engines are completed with Bi-Vanos and Vaveltronic. These electronic-operated automobiles use a streptonic transmission system with six levels of acceleration.

A no less exciting competition is also occurring in the sub- compact, hatchback automobile market. Popular makes in this class include, among others, Honda Jazz iDSI, Honda Jazz VTEC, Chevrolet Aveo, Hyundai Gets, Peugeot 206, Renault Clio and, lately, Suzuki Swift. This last mentioned automobile, which was launched at the Gaikindo expo, is available on the Indonesian market in a CBU condition. At a glance, this Japanese-made automobile, which made its debut appearance in the Paris Motor Show in 2004, resembles BMW's new Mini Cooper. Not surprisingly, Suzuki Swift has immediately stolen the attention of car enthusiasts.

Provided with a 1.5-liter, 4-collinear-cylinder, 16-valve (4 valves a cylinder) DOHC, variable valve timing (VVT) engine, Suzuki Swift directly faces Honda Jazz with its VTEC (Variable Valve Timing and Lift Electronic Control). The VVT technology makes the engine more powerful and more efficient in fuel consumption while its combustion residue will be more environmentally friendly.