Korean car makers expect larger share of local market

JAKARTA (JP): South Korean car makers KIA and Hyundai are upbeat they will be able to control a larger share of the Indonesian market despite tight competition in the local market.

San Gunawan, sales and marketing director of PT KIA Mobil Indonesia, said he hoped KIA's market share, which is only about three percent at present, would be able to increase to 15 percent in five years.

"We will introduce a number of new brands to meet the target," San told The Jakarta Post after a media briefing to introduce its latest models, the Magentis sedan and Pregio van which were on display at the Gaikindo 11th Auto Expo 2001.

KIA's car sales hovered at 10,000 units last year, or only three percent of total domestic car sales of 300,000 units.

"Our sales will plunge by 25 percent to 8,000 this year due to the shrinking auto market at home," San said.

San attributed the decline to the shrinking domestic market following prolonged uncertainty in the country's security situation.

KIA is popular, with the Carnival and Carens models making their initial appearance last year. In the expo, KIA was also introducing the Rio sporty sedan, Visto van, and Sportage station wagon.

Separately, other Korean car distributor PT Hyundai Mobil Indonesia said his company found it no problem to compete against the Japanese car makers.

The company's branch manager and dealer handling development and the planning of marketing, Arief Gunawan, said brand names were no longer important for local buyers as long as they offered high quality and convenience.

Arief indicated that in the sedan category, Hyundai's Accent was not much different in its features from other brand competitors such as the Honda City, Suzuki Baleno or Toyota Soluna.

"What matters for customers now is better after sales service. That's the battleground for the auto industry now," Arief said.

Revealing a more aggressive target than KIA's, Arief said his company would raise its market share to five percent this year from three percent last year.

"In the next five years, we will hold an 18 percent share of the country's auto market, becoming one of the top three major car manufacturers here," Arief told the Post.

Arief said his company planned to sell 15,000 cars this year, a 40 percent increase from 9,000 last year.

He attributed the significant increase to the latest car models, the Accent sedan and Matrix car.

Those two car models would contribute 60 percent to the company's car sales, he said.

Citing a strong response to the two cars, Arief said the company had sold some 50 units of each during four days of the exhibition.

Apart from those two models, the company was exhibiting the Santa Fe, Sonata, Atoz, and Trajet. (03)