Cheap sedans threaten van market
Cheap sedans threaten van market
JAKARTA (JP): The current entrance of new cheap cars into the
local market is likely to change the structure of auto sales,
with sedans taking over the market presently dominated by multi-
purpose vehicles.
Chairman of the Indonesian Automotive Industry Association
Herman Z. Latif called on the existing auto firms to quickly
adapt to such changes.
"There will very possibly be no growth (in sales), only
changes of market segmentation ... Therefore, every auto firm has
to reorient its business," Herman told journalists yesterday.
He noted that during the first semester of this year, domestic
auto sales dropped by 14.4 percent to 160,000 units as compared
to the same period last year.
Competition in the domestic auto market has been heightening
following the introduction of the government's national car
policy last February, which grants tax and tariff breaks to PT
Timor Putra Nasional, a company controlled by President
Soeharto's youngest son, Hutomo Mandala Putra.
Collaborating with Kia Motors Corporation of South Korea,
Timor Putra launched its Timor car -- deemed as the national car
-- earlier this month. The Timor sedan, with a 1,500cc engine, is
sold at Rp 35.75 million (US$15,210) on the road, half the price
of most Japanese sedans of the same type.
Challenging Timor Putra, PT Citramobil Nasional -- a company
controlled by Hutomo's elder brother, Bambang Trihatmodjo --
introduced its own national cars called Bimantara Cakra (with a
1,500cc engine) and Bimantara Nenggala (1,600cc) in cooperation
with Hyundai Motor Company of South Korea. Citramobil offers
Cakra at Rp 44 million on the road and Nenggala at Rp 59.5
million.
Today, PT Indomobil Niaga Internasional, a subsidiary of the
giant Salim Group, will enter the fray by launching its cheap
sedan called Suzuki Baleno to coincide with the opening of the
9th Jakarta Automobile Expo, which will run until August 4.
The 1,600cc Baleno -- complete with power steering, power
windows, central door-locking system, air-conditioning, a radio
tape player and noise reduction system -- sells at Rp 43.5
million off the road.
Indomobil, in cooperation with Japan's Suzuki Motor
Corporation, also plans to produce two Indonesian-brand
automobiles, Bintan and Karimun.
Indomobil president Subronto Laras said that the Bintan sedan
would be produced with 1,300cc, 1,600cc and 1,800cc engines,
while the Karimun would be similar to the Suzuki Sidekick jeeps.
"We obtained approval in principle for the two brand names two
months ago. We redesigned the two cars two years ago," Subronto
said, adding that 40 percent of the cars' materials are to
originate from Indonesia.
And the competition will not stop here as the indigenous
Bakrie Group, which has yet no auto firm, plans to produce
another national car in cooperation with a European auto firm.
"This is good for customers," Poeng W. Lubis, a director at
Citramobil said, commenting on the current auto market
development.
"This heightening competition will drive us -- all auto firms
-- to improve our efficiency. So it is good for us to prepare
competition in the global market," he said after attending the
two-day meeting of the ASEAN Automotive Federation (AAF), which
ended here yesterday.
The AAF brings together auto associations from members of the
Association of Southeast Asian Nations, except Brunei. They are
auto associations from Indonesia, Malaysia, the Philippines,
Singapore, Thailand and Vietnam.
Sharing Poeng's view, Minister of Industry and Trade Tunky
Ariwibowo said yesterday that the government welcomes any fair
competition, which is good for the people.
"If the people are happy, the government is also happy," Tunky
said.
He said the entrance of new, cheap cars into the market will
not drive out the Timor car, saying that the local auto market,
which may shrink this year, will surely grow in the future. (rid)