DaimlerChrysler pledges to keep assembly plant

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)