Luxury car market continues to show healthy growth

Hybrida Sakina, Contributor, Jakarta

The economic crisis that hit the country in 1997 badly hurt almost every type of business here for several years. Part of the damage is still lingering in many sectors.

The automotive industry is no exception. However, the luxury car segment, to a certain degree, managed to escape relatively unharmed. Some observers attributed the survival of this segment to the unaffected and immense purchasing power of its limited number of customers, the super-rich and VVIPs.

Gunadi Sindhuwinata, president director of PT Indomobil Sukses International Tbk., whose premium brands are Audi and Volvo, said that the luxury car segment, apart from being a prestigious and small niche, mostly comprised familiar names and faces. "With a couple of new buyers entering this elite circle from time to time, most of them remain the same year in, year out," he added.

Although understandably this segment, which buys cars worth more than one billion rupiah, comprises only a fraction of the population, in comparison to the between Rp 150 million and Rp 200 million segment, it remains lucrative for both authorized distributors and importers.

Currently, almost every major car maker is "well represented" in the luxury car segment, such as BMW, DaimlerChrysler, Volvo, Audi, Volkswagen, Jaguar, Porsche and Ferrari as well as a number of renowned Japanese brands.

Sales figures in this segment, to the delight of the companies' marketers, are rising. PT BMW Indonesia, for example, is also optimistic that this year's figure will exceed last year's, which was 2,276 units. "Until September this year we have sold more than 1,700 cars. We feel confident that sales of BMW cars will go up as the economy is improving," said Helena Abidin, head of public relations at the company.

According to her, the political situation as general elections loom will not greatly affect the luxury car market in Indonesia, including the sales of BMWs. The largest portion -- some 80 percent -- of the company's sales here is contributed by the BMW series 3, while the BMW series 5 is about 12 percent. The balance is in sales of the BMW Z4, series 7 and the BMW X5 SUV.

In the Sports Utility Vehicle (SUV) segment, the competition is getting stiffer with the entry of leading brands and variants, like the Porsche Cayenne, Volkswagen Touareq and the latest version of SUV from Mercedes Benz.

Helena also said that recently the luxury car market had significantly expanded further as customers now also include CEOs, entrepreneurs, senior executives and professionals from a wide range of vocations.

Meanwhile, Trifena, marketing communications manager of PT Prima Auto Grupindo, the authorized dealer of Jaguar cars in Indonesia, said that the company was optimistic it would hit 170 in sales. Last year 159 Jaguars were sold here. "We are quite upbeat about the excellent growth of this segment in Indonesia. This year's first semester saw the sales of 59 Jaguars, which is higher than the number in the same period last year, which was 52 units," he said.

To date, the company is marketing the Jaguar S, X and the latest XJ series.

The car exhibition organized by the Indonesian Automotive Industry Association (Gaikindo) in July, 2003 has, to some extent, contributed to better sales. Another event, the Dream Cars Contest, held in October, is expected to boost sales further. Most players in the automotive industry, manufacturers as well as importers, are optimistic that such events not only create a kind of festive atmosphere, but actually produce sales, including those of completely built up (CBU) and premium brands. CBU is the automotive industry term for completely manufactured cars -- not to be reassembled here -- imported into the country.

Association of Car Importers of Indonesia (AIKI) chairman Budhiman Sirodj was also enthusiastic about the current positive sales trend of imported cars. He said the increase in sales of CBU cars, brought to the country by importers, was one clear indication that the luxury car segment was improving fast. "The car exhibitions, including Dream Cars Show, have contributed a lot," he commented.

The exhibition, held at Jakarta Convention Center, presented a wide range of CBU brands, totaling more than 120 cars. The price tag was between Rp 130 million and five billion rupiah. Even such world famous brands, like Lamborghini Murcielago, Ferrari 575 M Maranello Fi and Hummer H2, could be found at the venue.

Next to other types of marketing communications, the event helped car importers erase the negative or misleading image that they do not provide the expensive cars with the required after- sales service.

"We abide by all regulations made the Trade and Industrial Ministry. Plus, we make the necessary technical adjustments for this market and, of course, we provide superior after-sales service and all the relevant warranties," said one importer at the event.

Different from the aggressive, big-budget campaigns of lower priced cars, due to its exclusive character, marketers of luxury brands prefer to use a more personalized direct selling method.

Like what Deputy director of PT DaimlerChrysler Indonesia Anto Nurdiyanto said: "We are very selective in our marketing communications and the use of advertising. Knowing that our target market are the kind with very little time, we opt for the direct selling method, in the broadest sense of the phrase, that is. For example, our marketing executives actively and regularly inform them of the latest developments and information. We also invite them to certain events and gatherings, such as new product launches and so forth." Their superior products and brand equity, he added, are valuable assets in marketing.

Indeed, to market these extraordinary, extremely expensive items to the special few, an out-of-the-world method is called for. And it is certainly not the noisy clamor or humdrum of impersonal communication messages.