Citramobil Nasional cuts Bimantara car prices

Citramobil Nasional cuts Bimantara car prices

JAKARTA (JP): PT Citramobil Nasional, a unit of publicly
listed PT Bimantara Citra, has slashed its car prices by six
percent to capture the growing sedan market.

Citramobil president Jongkie D. Sugiarto announced yesterday
that the 1,500-cc Cakra sedan now sold for Rp 42.5 million
(US$17,450) with on-road costs, down from Rp 45 million.

The 1,600-cc Nenggala sedan now sells for Rp 56 million, with
on-road costs, down from Rp 59.5 million.

"The price cuts are possible due to the increased local
component percentage in both sedans and the reduced import
tariffs on the remaining imported kits," Jongkie said.

He said the Cakra sedan -- which is essentially a renamed
Hyundai Accent imported from Hyundai Motor Co of South Korea in
complete knocked down form and assembled locally -- was 20.64
percent made with local components.

Nenggala sedan -- a renamed Hyundai Elantra -- is 20.79
percent local components.

Jongkie said the local components in both sedans were
universal components like glass, rubber and plastic, suspension,
brake system, clutch and steering systems.

Fourteen local vendors supply Citramobil with components.

As Cakra and Nenggala sedans contain more than 20 percent
local components, the tariffs on the remaining imported
components are dropped to 50 percent, down from 65 percent.

On top of import tariffs, when the cars are sold they are
subject to a 35 percent luxury tax and 10 percent sales tax.

Jongkie said the price cuts were expected to drive up the
sales of both cars to 350 cars a month each, from about 300
vehicles a month.

Competition

He said the price cuts would help them survive the tough
competition now, particularly from the duty and tax exempt Timor
sedan.

Cakra's new price is only slightly higher than the 1,500-cc
Timor sedan.

"Our new prices are the best prices for now. When we increase
our local components to over 40 percent or even 60 percent, we
will cut our prices again," Jongkie said.

Jongkie said Bimantara Citra and Hyundai would form PT
Bimantara Hyundai Indonesia to construct and control automotive
manufacturing facilities in the 500-hectare Bimantara Automotive
Industrial Estate in Purwakarta, West Java.

Construction will start soon after PT Bimantara Hyundai
Indonesia is formed on Thursday, and be completed by the end of
next year.

"By January 1999, we will start producing a vehicle with local
content of over 60 percent," Jongkie said.

The auto complex will have assembling, body stamping and
machining facilities.

Jongkie said the facilities would have an initial production
capacity of 100,000 vehicles a year.

Meanwhile, Poeng W. Lubis, another Citramobil Nasional
executive, predicted that by 2000, sedans would make up almost 50
percent of the local auto market, which could reach 600,000
vehicles.

Currently, sedans account for less than 15 percent of the
market.

Poeng said the sedan market would expand as prices dropped.

"People now buy commercial vehicles because they cannot afford
sedans. Whenever sedans prices reach the same as commercial
vehicles, people will definitely choose sedans," Poeng said.
(rid)