Indonesians put price first when buying a car
The Jakarta Post, Jakarta
As each driver stops at Toto's booth to pay the parking fee, the 21-year-old parking attendant counts down eagerly for the day when he will join them on the other side of the booth as a car owner.
"Cars are cheap now, so why should I bother to buy a motorcycle?" said Toto, who earns about Rp 2 million (US$210) monthly as a parking attendant at an office building on Jl. Jend. Sudirman, Central Jakarta, and also from his other side job. "Plus, they (cars) are safer and more prestigious."
Potential buyers like Toto should prompt the automotive industry, which has forecast that this year's sales will increase by 10 percent to 530,000 units, to carefully price their products, according to a recent survey by market research firm ACNielsen.
The firm's online survey -- covering 14,134 respondents worldwide -- revealed that Indonesia was among the top three countries, of the 28 polled, with the highest percentage of people intending to own a car.
In recent years, the availability of affordable cars and easy financing have spurred auto sales in Indonesia, making it one of the world's hottest car markets with a 36 percent jump in sales in 2004.
According to the survey, 82 percent of potential car buyers in Indonesia, compared to 74 percent in the Asia Pacific region, mentioned price as the most important factor when buying a car.
Managing Director for ACNielsen's Southeast Asia operations, Farquhar Stirling, said car dealers should therefore maintain their approach of supplying "affordable vehicles for the whole population".
More surprisingly, he added, was the fact that only 26 percent of potential car buyers in Indonesia, compared to the regional average of 49 percent, said that vehicle performance was an important factor, the lowest among the 14 Asia-Pacific countries surveyed.
"It's interesting that Indonesia is down there," said Stirling, adding that respondents surveyed online tended to be better educated and wealthier than the general population. "Again it validates the fact that the country is very price conscious."
He explained that to the Indonesians surveyed, the second most important factor was brand image, or the prestige, of the car.
"That's why branding strategy is also important here," said Stirling.
The survey revealed that 24 percent of the Indonesians surveyed considered Toyota as the top brand -- thanks to its affordable Kijang Innova and Avanza MPVs -- followed by Honda (13 percent), which saw a 215 percent increase in sales last year after the launch of their Jazz compact car.
Stirling said the growing number of motorcycle owners -- boosted by cheaper prices and easy credit facilities -- also constituted a strong base for potential car buyers.
"Trading up to a small car (for motorcycle owners) is the next obvious step," he said, pointing to the fact that many Indonesians treated their motorcycles as "family vehicles" that could carry up to five people regardless of safety.
For Toto, the availability of low priced cars and easy credit terms -- which sometimes only require a 5 percent down payment and installments of up to five years -- has made him consider buying a car.
"I've already saved enough money to make a down payment for an Avanza," said Toto, referring to the entry-level car with a price starting at Rp 93.5 million. (002)