Korean car firms to erode Japanese market share
Korean car firms to erode Japanese market share
JAKARTA (JP): South Korean car companies, Daewoo and Hyundai,
will join force to weaken the market shares of Japanese
automobiles which now dominate the domestic market, an automotive
businessman said yesterday.
"We at Daewoo and Hyundai are planning to pool our resources
for penetrating the Japanese market dominance," Franky Suhalim, a
sales and marketing manager of PT Starauto Dinamika which is the
assembler of Daewoo cars, told journalists.
Franky said the Korean cars, supported by good quality and
services and cheaper prices, would be able to topple the Japanese
market leaders.
Only two Japanese makes, Mitsubishi and Toyota Kijang, are
taking part in the nine-day auto exhibition at the Jakarta
Convention Center. The other exhibitors are Daewoo, Hyundai,
Mercedes, Ford, Opel and Chrysler.
He said that Daewoo Motor will launch in November the 2000-cc
Daewoo Espero sedan with a price tag of Rp 70 million
(US$31,400), which is 30 percent lower than the average price of
other cars of its category and type.
He said Daewoo, which had invested Rp 130 billion in its
assembling plant at Cakung, north of the city, will also launch
the 1,500 cc Nexia sedan with a price of less than RP 50 million.
"We will be able to offer such a low price even though our
local content now is only about 10 percent. You can imagine, how
cheap will be the prices of our cars when we gradually increase
our local content," Franky said.
He said that Daewoo planned to build a new assembling plant at
Cikarang, Bekasi, with an investment of about Rp 260 billion.
The new plant will increase Daewoo car production from 10,000
units a year at its Cakung plant to 35,000 units, he said.
Franky is optimistic that the sedan market will eventually
become much larger than that of mini buses (modified from
commercial vehicles) as the per capita income of the people
steadily increases.
"The more competitive sedans will be if their prices can be
reduced to as low as those of vans," he added.
According to Franky, the production costs of Korean cars are
much cheaper than Japanese ones because of the much lower labor
costs in Korea and the stability of the Korean won.
"Moreover, the Korean car industry is supported by the world's
largest steel industry," he pointed out.
Anky Camaro, an executive of the Indomobil Group which sells
mostly Japanese cars, said that his company would have to reduce
the prices of its cars to be able to compete with the Korean
automobiles.
"There will be tough competition, we will have to decrease our
car prices," Anky told reporters at the exhibition yesterday.(04)