Chrysler and Ningz Pacific setting up joint venture

By Russell Williamson

CHRYSLER is close to finalizing its joint venture arrangements with its Indonesian partner, which will allow the giant U.S. manufacturer to focus more attention on the local market.

Chrysler's Indonesia manager, Michael Buchanan, said the partnership with local firm, PT Ningz Pacific, should be formalized by about the third quarter of this year.

He said this will allow the company to have a greater influence on the way its products were sold here and enable it to slowly increase its market share.

"We will have some influence on how the product is marketed and what we bring in and advertising and those kinds of things," Buchanan said.

"We think the Indonesian market is going to be a pretty substantial market in years to come and we would like to get a foothold here and start introducing some of our product," he said.

Chrysler currently sells the Jeep Wrangler and Jeep Cherokee, although the slow-selling Wrangler is about to be discontinued.

It will not be replaced with the new model -- which was launched in the U.S. last year -- because it is not available in completely knocked down kits.

"There are some Wranglers left that we will finish production on within the next two or three months and from that point on it will be just the Cherokee," Buchanan said.

Despite the loss of the Wrangler, Buchanan said Chrysler hoped to sell about 1,500 cars this year -- up from 1,000 last year.

To help achieve this target, the Rp 115 million upmarket four- wheel drive Cherokee will receive a facelift about July.

Although the 4000cc straight-six engine and other mechanical underpinnings remain largely unchanged, the car gets a new, more- rounded exterior and a whole new interior offering improved ergonomics.

Buchanan said he believed 1,500 sales with just the one model was achievable as volumes last year were hampered by lack of supply.

"At present, we have limited production capabilities because we are moving our manufacturing into a different plant," he said.

"We haven't been able to produce since October last year so we really won't have inventory to sell coming off the production line till April, so it has really put a crimp in the volume that we could do."

Next year, Buchanan expects volumes to increase even more substantially as the company adds a second model to the lineup in the form of the upmarket people mover, Voyager.

The 3300cc V6-powered Voyager will be offered with a high degree of equipment and comfort levels and is expected to be priced to compete with Nissan's Serena at about Rp 100 million.

Power to the front wheels will be via a four-speed automatic transmission.

Inside, passengers are well catered for with accommodation for seven and features which could include air conditioning, leather upholstery, all things electric and dual air bags.

Although timing for the launch has yet to be determined, Buchanan said he hoped to get the Voyager on sale by the first quarter of next year. He said this could enable the company to add a further 1,500 sales to its 1998 tally.

"If we can launch at the beginning of the first quarter and do some promotions with it, it is such a popular product that we could get 1,500 sales out of it," he said.

"Every country it has been launched in, it has been very successful and I see no reason why it wouldn't be that way here."

Although Chrysler has stated its firm commitment to the Indonesian market, it could still be some time before the company sells sedans here.

Michael said there was still no real market for the company's midsized sedans in Indonesia yet and the smaller Neon would be too expensive to be able to compete.

"Those cars are really a middle-class oriented car and I think it will be a couple of years before the middle-class in Indonesia is stepping up to buy that kind of car," Buchanan said.

"We are going to be a small niche market player for now and see how the market develops."