Electronics prices drop, time to buy, say traders

Electronics prices drop, time to buy, say traders

Sari P. Setiogi, The Jakarta Post, Jakarta

If you want to fill your house with the latest model
electronics goods, now may be the time.

The price of electronics, following last month's announcement
by the government of the abolition or reduction of a number of
taxes, has gone down significantly from last year.

When The Jakarta Post visited a well-known electronics center
in downtown Glodok, West Jakarta, on Friday, most prices had
fallen from 10 percent to 30 percent from last year.

These declines are the result of the new tax rules introduced
by the government early last month. The government eliminated or
reduced luxury taxes on some 45 products, mainly electronics.

Television sets measuring up to 21 inches, washing machines
with a maximum capacity of six kilograms, refrigerators with a
maximum capacity of 180 liters, air conditioners with a maximum
capacity of one PK are some of the items now exempt from luxury
taxes.

[PK is a Dutch term for horsepower, which is equivalent to a
freezing capacity of 9,000 British thermal units per hour.]

Other items receiving a luxury tax reduction of 30 percent,
20 percent or 10 percent include televisions measuring from 21
inches to 42 inches, washing machines with a capacity of six
kilograms to 10 kilograms and air conditioners with a capacity of
between one PK and two PK.

At Glodok, a Sony MHC-VX222 mini-compo stereo with three-CD
changer sells for Rp 2.3 million (about US$255), though customers
are allowed to bargain. Hendra, owner of New Asia Electronics,
said he used sell similar stereos for between Rp 2.5 million and
Rp 3.8 million.

The store also offers a 29-inch Toshiba 29A3DE true-flat
television set for Rp 3.5 million, about Rp 600,000 less than
before the tax reduction. A similar product can be found at
Victory Electronic for Rp 3.45 million.

Television sets from smaller manufacturers like Chang Hong,
Aurora, Bombasound and Jonsa have also started to enter the
market at much lower prices. A 14-inch Aurora television set, for
example, sells for Rp 675,000, and Bombasound and Jonsa TVs for
Rp 700,000.

A Samsung washer-dryer with a capacity of seven kilograms is
available for Rp 1.5 million, as compared to its former price of
Rp 2 million. A Samsung WT11S2 washer, without dryer, with a
capacity of 11 kilograms is tagged at Rp 1.8 million.

Refrigerators can also be had at lower prices since the new
tax rules. A single-door Toshiba with 12-liter capacity is
available for Rp 1.175 million, down from about Rp 1.5 million.

Reduced prices can also be found at electronics superstore
Electronics City in the Sudirman Central Business District in
South Jakarta.

Several items had been discounted ostensibly to commemorate
the Chinese New Year earlier this month. But an attendant who
asked not to be named said on Saturday the discounts might have
something to do with the new tax rules.

Back at Glodok, Hendra told the Post there seemed to be a
significant increase in the interest in electronics goods, with
more customers coming to his store, particularly on the
weekend.

"But there has been no noticeable increase in sales yet," he
said. "People appear to still be waiting for further price
reductions, which I don't think will happen.

"It would be hard for retailers if the prices changed
substantially too often. We would not be able to make business
calculations," Hendra said.

On the other hand, he is certainly pleased with the current
situation.

In the past, producers had to compete with much cheaper
smuggled goods, but now the price gap between legal and smuggled
goods has narrowed.

Ahiung of the Maju Jaya store in the Harco Glodok shopping
center told the Post smuggled goods were now only about Rp 25,000
to Rp 75,000 cheaper than legal goods.

With such a small difference, customers now prefer to buy
legal products with a warranty rather than buy smuggled goods
that do not contain warranties, he said.