DaimlerChrysler pledges to keep assembly plant

JAKARTA (JP): PT DaimlerChrysler Indonesia, the sole agent of Mercedes-Benz in the country, pledged here on Thursday to maintain its local assembly plant despite a trend among high-end car manufacturers to sell completely built-up (CBU) versions in the local market.

Company president Friedel Engisch said here on Thursday most of its Indonesian buyers were satisfied with the locally made Mercedes-Benz, and only a few wanted their cars equipped with some of the exceptional features found in the CBU models.

"Basically, we'll continue to optimize the use of our production plant here ... The majority of our cars sold here will be the locally assembled ones," he said during a media conference.

All of the company's locally assembled cars use imported components.

He said the company's sales of CBU models would decline next year to about 30 percent of total sales after it starts locally assembling the Mercedes-Benz C-Class models, which are currently imported in CBU form, at its plant in West Java at the end of this year.

This year the sale of CBU units is estimated to account for 40 percent of the company's predicted total sales of around 2,500 vehicles, he said.

Engisch said the company expected to produce between 800 and 1,000 units of the C-Class version next year.

He said he was not concerned that car producers like General Motors, Range Rover and BMW were focusing more on the sale of their CBU models to meet an increase in local demand for the more expensive and prestigious vehicles.

General Motors recently launched two CBU models, the Chevrolet Blazer V6 and family wagon Zafira, while BMW said it would import several CBU models this year, including the BMW 528iA-T station wagon and the BMW X5 4.4A off-road jeep.

Local car enthusiasts have recently been able to satisfy their craving for exclusive foreign-made vehicles thanks to the government's decision to open the country's automotive market to CBU vehicles.

Many of the CBU cars have been shipped to Indonesia not by authorized dealers, but by general importing companies, which are allowed to import the vehicles as part of the government's new automotive policy.

Indonesia first eased restrictions on the importation of CBU cars in July of last year by cutting import duties of the vehicles to between 65 percent and 80 percent depending on engine size. The import duties previously were as high as 200 percent.

However, in February of this year then minister of industry and trade Jusuf Kalla issued a decree banning the importation of CBU cars with an engine capacity greater than 4,000cc or priced over US$40,000, saying the presence of such luxury vehicles would cause social jealousy.

The government, however, revoked the ban in June in response to protests from major car manufacturers.

DaimlerChrysler Indonesia, which currently distributes the Jeep Cherokee and Chrysler brands in addition to the Mercedes- Benz, said it would display its CBU models along with its locally assembled vehicles at the Gaikindo car expo from Sept. 6 to Sept. 12.

The models to be displayed at the expo include two versions of the completely built-up C-Class, the Mercedes-Benz A, M, and S Classes, the Jeep Grand Cherokee and Chrysler's family wagon the Grand Voyager.

The company also will exhibit a prototype of its first Mercedes-Benz car, which was produced in 1886. (cst)