GM won't raise Opel price

JAKARTA (JP): PT General Motors Buana Indonesia (GMBI) announced yesterday it would not increase the price of its Opel despite the price hike of other cars.

"We are extremely reluctant to raise prices at present," said GMBI's director of sales Terry B. Johnsson yesterday.

Johnsson attributed the company's ability to cope with the rupiah's recent sharp decline against the U.S. dollar to the high level of local content in its vehicles.

"However, like all car manufacturers here, we are obviously under severe pressure to increase prices," he said.

He said the company would "have to change if the current financial climate does not improve".

Several car companies, including Toyota manufacturer Astra group and PT Timor Putra Nasional, which produces Timor cars, announced earlier a hike in their car prices to meet rising operational costs as a result of the rupiah's sharp drop against the U.S. dollar.

The rupiah has dropped by over 10 percent in the last few weeks following speculative attacks from local and foreign fund managers.

The rupiah recovered again in the last three days, following the central bank's move to increase its interest rate.

Johnsson said there would have to be a long-term adjustment in Indonesia's car market to reflect changed financial circumstances.

"To that end we are prepared to absorb some of the costs of depreciation in the short-term," he said.

Johnsson said prior to the currency crisis, record sales figures reflected the demand that existed for Opel vehicles.

GMBI is a joint venture between Garmak Motor and the General Motors Corporation. (das)