Hyundai to face tough competition

Hyundai to face tough competition

JAKARTA (JP): The entry of South Korea's Hyundai Motor Company
into the country's car market will increase the competition, but
it won't significantly erode the market shares of established car
makes, an automotive businessman said yesterday.

The president of Indomobil Group, a subsidiary of Salim Group,
Subronto Laras said the majority of consumers in Indonesia still
prefer multi-purpose cars, such as Kijang and Panther minibuses.

"If they (Hyundai) want to enter this market, they will get
difficulties," he told reporters after the signing ceremony of a
joint venture between Indomobil Group and Sumi Rubber Limited.

Hyundai in cooperation with PT Citra Mobil Nusantara, a
subsidiary of Bimantara Group which is controlled by Bambang
Trihatmodjo, has started assembling 1,596-cc Hyundai Elantra
sedans with a price of Rp 60 million (US$27,270) each.

If the lower price is Hyundai's market strategy, Subronto
said, that will not be effective because Indonesian consumers
don't look primarily at the price.

He said the failure of Mazda MR, a low-priced sedan made by
Indomobil, indicated that a cheap price alone will not influence
the market.

"The consumer preference is multi-purpose cars for family
use," he pointed out.

Subronto said that in the 1,600-cc sedan market, with annual
sales of 12,000 units, the leaders are Toyota Corolla, Honda,
Mitsubishi Lancer, and Mazda, with prices ranging from Rp 60
million to Rp 80 million.

He added that the 1,300-cc sedan market is dominated by
Daihatsu Classy and Suzuki Escudo, Katana, Sidekick and Esteem.

"So, which market segment does Hyundai intend to enter?" he
asked.

According to Subronto, Indonesian consumers also look at the
resale price of a car when they choose the make of car they want
to buy. (04)