Local auto market seen to stay flat

Local auto market seen to stay flat

JAKARTA (JP): Competition among local auto firms will get
tougher next year because the market won't improve, the
Indonesian Automotive Industry Association's chairman said
yesterday.

Herman Z. Latief projected domestic sales of automobiles would
drop 15 percent this year from last year's 270,313 vehicles.

"My prediction is that next year's auto sales will slightly
surpass this year's level but not last year's," Herman said
Wednesday.

As long as the government maintained its tight monetary policy
next year, it would be hard for auto firms to improve their
sales, he said.

"Moreover, we will have a general election next year. It's not
something new. But, whenever there is a general election,
economic activities slow down."

Domestic auto sales dropped 15 percent in the first 11 months
of this year to 292,935 vehicles, compared to 348,705 vehicles in
the same period last year, according to the association.

Auto analyst Suhari Sargo argued the drop was caused by the
government's tight monetary policy rather than its national car
policy.

The car policy, introduced in February, grants duty and tax
breaks to PT Timor Putra Nasional to produce national cars, Timor
sedans, in cooperation with Kia Motors Corp. of South Korea.

Timor Putra -- controlled by President Soeharto's son Hutomo
Mandala Putra -- sells its 1,500cc-engine Timor sedans for Rp
35.75 million (US$15,200), half the price of similar Japanese
sedans.

Suhari said sedan sales did not drop drastically as expected.
In the first nine months of this year they dropped 2 percent to
about 35,000.

The most serious drop was in first category commercial
vehicles, including mini vans. Their sales dropped 22 percent to
199,721. (rid)