GMI halts expansion plan due to crisis

GMI halts expansion plan due to crisis

JAKARTA (JP): Automotive producer General Motors Indonesia
(GMI) has put on hold some of its local expansion projects due to
the economic crisis.

GMI's president William S. Botwick said on Monday that the
company initially planned to introduce new models of four-wheel
drive vehicles in the country, but it had to cancel the plan.

"For the time being we will focus on our Opel Blazer model in
Indonesia, while maintaining Opel's position as the leading sport
utility vehicle in Indonesia," he said at a media conference.

Botwick said the company also had planned to export its
vehicles to other Southeast Asian countries, but the plan was put
on hold as those countries impose high import duties on cars
during the regional economic crisis.

He said the economic crisis had also forced the company to
slash its production capacity by more than a half.

"But we are still producing while many of our competitors are
pulling out from Indonesia," he said.

He did not disclose the amount of the company's sales last
year, but said the company sold more than 100 Opel Blazers this
month.

Botwick said the company would continue its business in
Indonesia, despite the deepening crisis, especially after it
controlled the whole stake of GMI, formerly known as General
Motor Buana Indonesia (GMBI).

The company, which was previously partly owned by local firm
Garmak Motor, began producing automobiles in September 1994 with
the Opel Vectra, followed by Open Optima sedans and Opel Blazer.

GMI announced on Monday a program to replace the timing belt
systems on all locally manufactured DOHC and LT versions of Opel
Blazers.

Owners of DOHC and LT Blazers are asked to contact their local
dealers as soon as possible to schedule a free system upgrade on
their cars' timing belts.

Botwick said the timing belt system upgrade was being
performed because a GMI investigation revealed that there was a
potential that the system could fail.

"Although the safety of the vehicle and its occupants are not
an issue, we want all of our DOHC and LT Blazer owners to feel
secure with their vehicle. We want them to know that GM Indonesia
is committed in providing the very best product possible," he
said.

Botwick said the program covered all Opel DOHC and LT Blazers,
even those in which the initial warranty period had expired and
those which had seen an ownership change.

"Consumers do not have to pay anything for the upgrading.
However, it is not an inexpensive program for us, as we have to
spend over $1 million for it," he said.

He said the program would enable the company to boost sales,
which had dropped significantly.

The program will be initiated in stages. System upgrades began
on March 29 in Jakarta and West Java. The program will get under
way in Central Java, East Java, Sulawesi, Sumatra and Kalimantan
beginning April 5.

Botwick said that in order to encourage customers to take
their vehicles to dealers, the company would provide a
complimentary oil change. (gis)