Ford cars set to return to Indonesia's streets
Ford Motor Company held an international media gathering, the International Media "Deep Dive", at its headquarters in Dearborn, Michigan, from Oct. 15 to Oct. 18. The Jakarta Post's Soeryo Winoto was among the journalists from the Asia-Pacific region invited to participate in the international program.
DEARBORN, Michigan (JP): No matter where you are in Indonesia, you are bound to see countless Japanese cars on the streets.
And if you ask anyone what the most popular vehicle in Indonesia is, they will likely answer the Toyota Kijang. No one will mention Ford.
For Indonesians over 50 years old, Ford is not a new brand. However, since Japanese vehicles hit the streets of the country in the 1960s, the market for American vehicles sank.
Today, Ford is sizing up opportunities to reenter the market here amid the tighter competition.
Despite the country's prolonged economic woes, many have said Indonesians cannot bear to part with their cars, especially those of prestigious brands.
Luxury vehicles -- many costing more than Rp 1 billion (US$117,500) each -- cruising the streets of Jakarta and other major cities every day.
The demand for luxury vehicles, most of which are completely built-up imported cars, has been increasing. The latest sales record has indicated that about 2,000 vehicles were sold in March and April this year respectively. Last year, an average of 1,000 cars were sold per month.
The figures bring new hope to carmakers who had been eagerly awaiting the lifting of a ban on imports of completely built-up luxury cars with engine capacity exceeding 4,000cc.
"Ford must catch the opportunity," said Steven Tang, marketing manager of Ford Malaysia Sdn. Bhd.
Airing similar optimism, Ford president ASEAN Operations Gerald J. Kania said Indonesia was still a promising market for Ford.
"In cooperation with PT Indomobil, Ford will appoint some dealers this year," Kania told The Jakarta Post and Motor magazine. "We have also posted two people in Indonesia to study the market prospects in depth. Over the next five months we will make real steps toward starting our business in Indonesia."
He was upbeat, saying "your country has natural resources, human resources and a growing democracy".
The company, based in Dearborn, Michigan, produces Ford vehicles and controls Volvo, Land Rover, Jaguar, Aston Martin, Lincoln, Mercury and Mazda.
Ford cooperated with local distributor Indonesian Republic Motor Company (IRMC) for almost one year in the 1990s.
The cooperation halted after a year; Kania said Ford was hindered by the automotive policy made by the former New Order government. "Your country was concentrating on the Timor car at that time. Now, democracy is growing in your country."
Consequently, in comparison with neighboring countries like Malaysia, Thailand and the Philippines, Indonesia has lagged behind, although the Ford Laser was on the market some time ago.
Ford opened a new sales office in Manila in July 1997, and in 1999 the total market of Ford vehicles was 75,000 vehicles.
In Malaysia, where Proton, Perodua, Nissan, Toyota and Mercedes lead the car market, Ford Malaysia 1999 sales were 3,199 vehicles, while the 1999 total market was 288,547.
Ford has launched six new firms, representing an investment of $500 million, in Thailand since 1995 when the joint manufacturing venture with Mazda was set up.
The total market in Thailand in 1999 was 217,983 vehicles; the car market leaders in Thailand are Toyota, Honda and Nissan.
The sales performance of the company's vehicles in the three countries may boost its enthusiasm to return to Indonesia
"What we are going to do first is make sure Indonesians are aware that Ford is coming back," said Kania.
Global
In fact, Ford is working hard to gain the market not only in Indonesia, but also around the globe.
Aware of the growing challenges and tougher competition in the coming years, it is determined to improve customer satisfaction by launching Consumer Driven 6-Sigma, which started early this year. It is being led by highly skilled employees known as "black belts", according to Louise Goeser, vice president of quality.
"To date, 1,200 black belts have begun training and over 1,100 projects have been launched throughout Ford," she said.
The firm now controls seven other major global brands of Volvo, Mazda, Lincoln, Mercury, Jaguar, Aston Martin and Land Rover, besides its own brand.
According to Goeser, who is responsible for ensuring superior quality in the design, manufacture, sale and service of all Ford Motor Company vehicles and components worldwide, the great benefit of Consumer Driven 6-Sigma is its potential to achieve breakthrough results.
"Projects target more than 70 percent improvement, versus the traditional 5 percent to 10 percent improvement, and often achieve even more than that," she said.
E-business
The effort to reach out to customers is also demonstrated by the firm's utilization of the Internet.
"E-commerce enables us to improve customers' purchase experiences, draw consumers to Ford Motor Company brands, build loyalty among current consumers," said Brian P. Kelley, vice president and president of ConsumerConnect.
"Buyers can choose the car and transact on-line," he said, admitting that the Internet service would not change the art of purchasing a new car. "It's just to facilitate buyers' access to us."
He said more than 1.5 million people visited the www.Ford.Com. monthly, "but only some 3 percent of buyers ordered via Internet".
In February 2000, Ford and UPS Logistic Group (a subsidiary of United Parcel Service) set up a strategic partnership -- a first- of-its-kind joint venture -- to shorten the time required to deliver vehicles from Ford plants to dealers and customers in North America.
This deal includes a Web-based information system that allows Ford and its dealers to track the status of individual vehicles from production through final delivery, an option that finally will be extended to consumers.
Firestone
The company found itself at the center of a storm this year after several fatal accidents involving Ford Explorer sports- utility vehicles (SUV) fitted with Firestone tires.
"This is a tire problem, not a vehicle problem. However, we have yet to find the root cause of the Firestone tread separation," the firm's vice president of environmental and safety engineering, Helen O. Petrauskas, said.
In response to the misfortune and for the sake of customer safety, Ford instructed the recall of the Firestone tires from all customers and dealers starting Aug. 9.
"So far a total of 6.5 million tires have been recalled. The tire recall in the U.S can be completed by the end of November this year," Petrauskas said.
In Saudi Arabia, Malaysia and Thailand, Ford ordered the replacement of Firestone tires with Goodyear tires.
"This tragic experience is an opportunity to learn for the future. Now it's up to the buyers what tire they prefer to have. They can look to Good Year, Michelin or Continental, or anything else," she said.
Bridgestone/Firestone Inc., announced in August a voluntary recall of all Firestone Radial ATX and Radial ATX II tires in size P235/75R15 produced in North America, including Mexico, and Wilderness AT tires in size P235/75R15 produced at the Decatur, Illinois plant.
In Tokyo, investors rushed to dump Bridgestone shares in October after lawyers representing victims' families blamed the deaths of 28 Mexicans on defective Firestone tires fitted to SUVs and light trucks.
The tire chronicle has forced the resignation of the unit's chief executive officer.
It also cost the company a lot of money as it had to suspend operations at its assembly plants in Missouri, Minnesota and New Jersey.
A report on company earnings showed that third quarter net income amounted to $888 million. A year ago, third quarter earnings from continuing operations were $959 million.
"The decrease in earnings of $71 million is more than explained by the impact of Firestone's ongoing tire recall. Without the Firestone tire recall, profits would have been a record in the third quarter," the release said.
Petrauskas said, "It is not the money that concerns us. We put our customers' safety first".