Luxury car market continues to show healthy growth

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.