DaimlerChrysler ups stake in Indonesian venture
JAKARTA (JP): DaimlerChrysler, producer of Mercedes Benz cars, has injected US$45 million in fresh funds into its local partner, PT Mercedes-Benz Indonesia, to boost its operations in the country.
President of PT Mercedes-Benz Indonesia Frank Messer said on Monday the amount raised the German automotive giant's share in the joint venture to 95 percent from 60 percent.
He said PT Lima Satria Nirwana, owned by local businessman Iwan V. Joesoef, owned the remaining 5 percent.
"We had to raise our capital here and our partner couldn't provide the equal amount, so naturally our equity participation increased," Messer said after the opening of the one-week TECHNOGERMA '99 exhibition.
The president and CEO of DaimlerChrysler Southeast Asia, Ludwig-Holger Pfahl, said the company would be prepared to buy Lima Satria's share.
"We're willing to buy the remaining share whenever our partner wants to let go of its stake," said Pfahl, who is attending the expo.
Late last year, DaimlerChrysler raised its stake to 60 percent from 49 percent by injecting $10 million.
PT Mercedes Benz-Indonesia groups car wholesaler PT Stars Motors Indonesia, assembler PT German Motor Manufacturing and PT Star Engines Indonesia.
DaimlerChrysler is the recent merger of two auto giants, Germany's Daimler Benz and Chrysler Corporation of the U.S. The merger was completed in November last year.
Messer said Mercedes' sales in Indonesia dropped drastically last year.
Sales of passenger cars slumped to 444 units from 3,400 cars in 1997, while cross-country vehicles dropped to 20 from 32 the previous year.
Sales of commercial vehicles fell to 114 cars last year from 1,800. Exports of completely knocked-down and completely built- up lightweight trucks MB-800 Turbo and MBO-800 turbo trucks and bus chassis, however, rose to 750 units from 314 units in 1997.
Messer said he expected to export about 2,500 of the trucks and buses this year. Most will be exported to Turkey, South Africa, Egypt and Nigeria.
"We realize that the automotive industry here is going through a sluggish period, so this is our survival strategy."
The company also worked to reduce its overheads so it could maintain its workforce of 1,225, he said.
Pfahl added DaimlerChrysler intended to invest in a local financing and leasing company.
"I have talked with and sent a letter to State Minister of the Empowerment of State Enterprises Tanri Abeng in January to inquire about any sound state-owned finance firms that will be privatized."
He said Daimler was also interested in expanding into car leasing in the country. (das)