Economy cars draw avid interest

Economy cars draw avid interest

Tony Hotland, The Jakarta Post, Jakarta

The recent launch of economy car model by major automobile
manufacturer Toyota under its Avanza line -- priced under Rp 100
million (US$11,772) -- proves how huge a market exists here for
non-exclusive vehicles.

Astra International corporate communications head Yulian
Warman said the move was simply an effort to expand Astra's
market and to counter the flat sales of Toyota's enormously
profitable brand, Kijang.

"We conducted surveys after the economic crisis and discovered
that the demand for inexpensive cars was astounding; we didn't
have a product in that segment," he told The Jakarta Post late
last week.

Astra International owns a 51 percent stake in Toyota-Astra
Motors, the local distributor of Toyota automobiles.

Toyota is not the only automaker turning its attention to this
market, let alone the first. Toyota Motor Corporation's
subsidiary Daihatsu Motor also just recently launched the
Daihatsu Xenia, which sells for between Rp 60 million to Rp 90
million.

These two Astra products, said Yulian, had received a
"phenomenal" welcome. He said they had already received 19,000
orders for Avanza and 9,500 for Xenia, although the cars were
only launched on Jan. 15.

Other products in the market include big names Chevrolet
Spark, Suzuki Carry and Karimun, and the upcoming Every, also
from Suzuki.

While Yulian acknowledged that the growing market for lower-
priced cars might eclipse the sales of used cars and motorcycles,
he said Astra was simply offering more choices and this was
nothing but healthy competition.

The hype over Astra's novel products was observed on Saturday
during an exhibition of Xenia at the Semanggi Expo Center,
Central Jakarta.

"I like the car ... I might grab an order form. The car's
quite affordable, especially because it looks much like the
Kijang," said Riyanto, 31, upon returning from a test-drive.

Another visitor, Cynthia, 27, said after handing in her order
form that "my husband and I have been thinking of replacing our
motorcycle, and then there's this car. I think it's affordable
enough in times like these".

A Xenia sales executive said numerous visitors interested in
the car had submitted order.

Indonesia has been experiencing good performance in the
automotive sector, especially with the growing demand for cars at
prices under Rp 100 million.

In 2003, approximately 100,000 economy cars were sold, 60
percent of which were pick-up trucks, and the remainder, mini-
buses.

About 175,000 cars priced over Rp 100 million were also sold
last year.

Association of Indonesian Automotive Manufacturers (Gaikindo)
head Bambang Trisulo said the growth of this particular market
would be profitable for the industry as a whole.

"Producers of car parts will make a profit. It will also
create jobs and employ more human resources," he said.