"Good for business, good for family trips"

Lukas Subagio, Contributor, Jakarta

A number of analysts and observers say the Indonesian economy is gradually recovering -- at least, in the macroeconomic sense -- from the worst effects of the 1997 economic crisis.

Among the various indicators that make many manufacturers and business people sigh with relief is the strengthening of consumers' purchasing power, especially of those living in the country's major cities. Automotive sales, likewise, are also improving.

Indonesia -- the world's fourth most populous country -- has for years been a lucrative market for the automotive industry. What is unique, given the country's low income per capita, is that even the most expensive cars have buyers. For many Indonesians, having a car is a matter of prestige and a sign of his or her status, more than their prosperity.

Demands for certain brands are so high that they have to be ordered in advance, about two to three months prior to delivery. The automotive market is one of the most thriving in Indonesia. A quick look at the various media will prove this. Almost every two or three weeks a new model is launched. Automotive exhibitions are frequently held in many large cities here. Next to product launches, the media also prints news and articles related to the automotive industry. It is indeed a brisk world whose players strive to offer the customers the best possible services, discounts, gifts etc. Special clubs are also formed to maintain customer loyalty.

Advancements in automotive technology as well as the fierce competition have given birth to newer types of vehicles. Years back, there were mainly three categories: sedan, minibus and commercial vehicle. In recent years, a major revolution in engines and designs has occurred causing sharper segmentation.

Next to the sedan category, that includes small or luxury cars up to the sporty models, a newer sub-category is growing in popularity worldwide, including in Indonesia. It is the multipurpose vehicle (MPV), the fusion of a sedan and a minibus with all the pluses thrown in. It is the solution to those who want the best of both worlds.

One of the reasons behind the success of MPVs in the country is that they match the Indonesian consumers' needs for a vehicle that is multifunctional, meaning for business, leisure and family outings. Another reason is probably the low ratio of car ownership in Indonesia and the economical price of MPVs available on the market.

The smarter models of MPVs today make their owners feel just as confident as those with sedans. So, their pride or "prestige", as they prefer to call it, is not hurt and they get their money's worth.

The past three years have seen a significant growth in the sales of MPVs in Indonesia. This category is now about 30 percent of the entire national sales of vehicles, which is further evidence that they are not only here to stay but that increased growth can be expected. MPV owners even quip, quoting the ad line of one brand, "Ok for business, Ok for family trips, Ok for going anywhere ...."

The MPV category is now also experiencing the tightest competition. Almost every authorized agent and manufacturer has at least one MPV brand on the market: Toyota with its Kijang, Panther from Isuzu, Aerio made by Suzuki, Stream coming from Honda and KIA with two brands -- Sedona and Carrens -- just to name a few.

Due to the limited knowledge of car owners, some producers have got away with calling their products MPVs, though theirs are not MPVs in the true sense of the word. A vehicle can be categorized as an MPV based on its specifications, body design, interior, passenger capacity etc. Multi-functionality along with the greatest comfort and easy handling are the main elements or prerequisites.

Most reputable manufacturers are conducting educational advertising campaigns and PR activities so that their "real" MPVs are not confused with the so-called ones. This is only part of their efforts to gain a strong foothold in the market that comprises demanding and fickle consumers.

Naturally, another vital part of their marketing strategy is in making available a nationwide after-sales service with quality spare parts. Regularly providing free service that includes warranty and genuine parts is another way of giving customers a secure feeling in the brands they have purchased. This is further enhanced by importing engineers and mechanics from the home country, as done by KIA, for example, to ensure the high standards of vehicle maintenance.

With this kind of atmosphere in the domestic automotive industry, especially where producers sincerely care for their customers, who can predict how high sales will go. Including the increasingly popular MPVs. -- The writer is Deputy Marketing Director of PT KIA Mobil Indonesia