Krama Yudha to lower its car sales target

JAKARTA (JP): PT Krama Yudha Tiga Berlian Motors, the sole distributor of Japanese automobile producer Mitsubishi, is unlikely to meet its sales target this year due to an unexpected drop in demand over the last three months.

The company's president Gunaevy H. Djajasasmita said yesterday Krama Yudha expected to sell around 72,000 automobiles, including private and commercial vehicles, by the end of this year -- down 13 percent from its initial projection of 82,000.

"We initially projected to sell around 82,000 vehicles but we have had to lower our sales target to around 72,000 due to a lower demand stemming from the currency crisis," Gunaevy said.

He said the company faced a downward sales trend since the country was hit by the currency crisis last July.

The company sold around 8,001 vehicles in August this year, down from July's figure of 8,136 units.

He said sales continued to decline to 5,009 in September, 4,000 in October and 3,000 in November. "In December, the figure will be around that of November or even much lower than that," he said.

Gunaefy blamed the currency crisis, which has caused a decline in the rupiah by about 35 percent since early July, and the government's credit-crunching monetary policy for the fall in demand.

He said the Association of Indonesian Automotive Industries (Gaikindo) predicted that automotive sales would reach between 270,000 and 300,000 in 1998.

The association said that the country's automobile sales would only total 380,000 this year, much lower than the initial target of 420,000.

Last year, automobile sales reached 330,000 units.

"Hopefully Krama Yudha will be able to have around 20 percent of the total market share in 1998," he said.

He said such a low target had been made because the current monetary crisis would still be felt until next year.

Automotive analysts have said earlier that the credit crunch, the bleak outlook for most businesses and the steep increase in prices of imported goods were driving the car industry toward bankruptcy.

Gunaevy said yesterday that the company did not have any plan to lay off employees due to the monetary crisis.

"What we are going to do with the currency crisis is that we will decrease production shifts. We do not have any plan to lay off employees," he said.

Analysts previously have estimated that at least 300,000 people working in the automobile industry would lose their jobs in the face of currency crisis. (aly)