GM to announce decision on RI investment next month
By John Aglionby
American motor giant General Motors (GM) will announce whether it is to end its 13-month freeze on investment in Indonesia next month.
The decision to freeze investment was made after the introduction of the national car policy in February last year.
Helena Abidin, a spokeswoman for its Indonesian joint venture, General Motors Buana Indonesia (GMBI), said: "We will be making a statement regarding investment in August. At the moment, however, we are not ready to make any announcement."
GM froze its Indonesian investment in June 1996 after tax breaks were given to PT Timor Putra Nasional to produce a "national" car with Kia Motors of South Korea.
The head of its Asian and Pacific Operations, David Sullivan, said at the time: "I must say we have been very disappointed by recent developments in the national car program because it truly created an unlevel playing field."
Japan, the United States and the European Union have since taken the policy to the World Trade Organization. Their case is due to come before a trade disputes panel in the next few months.
If GM does decide to renew its investments, which include an assembly plant that cost more than US$110 million, GMBI will also announce next month which of Opel's new models will be available here, Helena said.
"As part of our commitment, we are assessing the opportunities to introduce the latest models to the (Indonesian) market. But we cannot say anything until after next month when we make an announcement on our overall position," she said.
GM, through its European arm Opel, sells three models in Indonesia, the small Optima sedan, the larger Vectra and the Blazer family jeep, although the Vectra is no longer assembled.
Last month Opel announced its strongest ever product offensive. In the next four and a half years it plans to announce 26 new models and model variants, eight of which it claims "will significantly extend the brand's commercial range".
GMBI president director William Botwick has confirmed the Sintra people mover and Frontera four-wheel drive will be introduced, but with investment frozen Helena said the company's current position was that "we are looking very closely at these two models".
The Blazer is the company's flagship model here. Between introduction in December 1995 and the end of June 1997 more than 5,250 have been sold. It comes in three variants; the Blazer LT, the Blazer DOHC and the Blazer SL-i, costing Rp 82 million ($33,600), Rp 75.5 million and Rp 65 million respectively on the road.
Helena said the sales goal for this year was 5,000. At the end of June the company was behind target, having sold only 2,060.
In December 1996 Indonesia became the first country in the world to assemble right-hand drive Blazers. Exports are to begin soon to southern African and other Asian countries that drive on the left.
Helena said: "We are just waiting for final government approval and then the exports will begin. It is just a question of sorting out the remaining paperwork."
She did not give any export targets but said that once the brand became known the company was confident of high sales.
"The Blazer is a unique family jeep that offers a high level of technology and interior comfort at an affordable price. And it is also like no other vehicle on the road. You can identify it easily from a long way away," she said.