Luxury cars a coveted commodity

Crisis, what crisis? A visitor to the country could be forgiven for having doubts based on the array of luxury model cars whizzing along Jakarta's streets. The Jakarta Post's Ida Indawati Khouw gets on track with the trend for newer, more expensive vehicles.

JAKARTA (JP): It was unbearably hot in Pecenongan, the busy, rather chaotic area in Central Jakarta.

Heating up the temperature was a long traffic jam, with noisy bajaj (three-wheeled motorized cabs) chugging out exhaust fumes along with public minivans and cars.

The holdup was for two men blocking traffic to allow two luxury VW Beetles to be parked in a showroom.

They had reason to be careful -- the showroom owner would stand to lose millions of rupiah if one of his cars, carrying a price tag from several hundreds million rupiah up to Rp 1 billion, suffered so much as a graze on its paintwork.

A new look has taken over auto showrooms along Jl. Pecenongan and other centers for the business in the city. Today they are displaying Jaguars, Ferraris and SsangYongs, which are newcomers to the country's roads.

Offering vehicles which are only affordable for the rich, the showrooms are incongruously sandwiched between cigarette kiosks, cheap food stalls, garbage carts and other reminders of the thin wallets of many Indonesians.

The paradoxical sight and the government's decision to open up the country's automotive market to completely built-up (CBU) vehicles will no doubt come as a surprise to many people abroad who are concerned about the country's crisis.

Minister of Industry and Trade Luhut Pandjaitan said the decision to lift the restriction on imported vehicles in June bore some positive results, including higher tax revenues and a boost in the activities of local car dealers.

Some car dealers acknowledged that the market for CBU cars was promising even though most Indonesians were still struggling to make ends meet.

An employee of Duta Motor car showroom in Pecenongan, Edi, said he was unable to meet the high market demand, which started to soar earlier this year.

"At that time, even if we had 50 luxury cars, I think I could have sold all of them."

For some, it is not an issue of having enough cash to buy a luxury vehicle, but how many more they want to add to their collection.

One such collector is Angky Camaro, vice director of Indomobil Group car distributor.

At present, he has two Nissan cars for his daily activities, but he is also ordering an Audi TT, a VW Caravelle and a Volvo S 80.

"I use the cars in turn based on my mood."

He said he was keeping up with trends.

"Using CBU cars is like wearing clothes from a boutique while the locally assembled ones are similar to wearing mass-produced clothes."

The owner of a printing company in Jelambar, West Jakarta, Lim Sim Nam, gave a different reason for choosing a luxury model.

"I heard that the imported cars are safer and more comfortable, that's why I intend to buy one even though I have a Toyota Kijang minivan and Toyota Crown sedan at home," Lim said as he looked over CBU cars at the Gaikindo Auto Expo 2000 on Wednesday.

"I will buy one for a price between Rp 300 million and Rp 400 million."

Expo

Those lacking the cash but wishing to experience the luxury can visit the Gaikindo expo at the Jakarta Convention Center, Central Jakarta, until Sept. 12.

Be prepared to jostle in a crowd as the show was flooded with visitors only two hours after its grand opening last Wednesday. It is the largest automotive expo in the country's history and international automakers are pulling out all the stops to show their newest, most stylish models.

Just look at Germany's BMW. The Rp 2 billion (US$250,000) James Bond-style Z8 sport car was imported especially for the event. "We are just showing it to see whether it has good prospects," said Nani from the automaker's marketing division.

Or Indomobil group with its Audi TT car (retails at more than $60,000), DaimlerChrysler's Rp 1.32 billion Mercedes-Benz S 320 L Automatic and the Rp 500 million Peugeot P 406 Coupe.

The cars may carry big price tags, but their makers are optimistic of making big killings.

German carmaker Audi's country manager for Indonesia, Nicholas Wilson, predicted total sales would grow to about 5,000 units next year from 4,000 this year. The company also has several service stations in Jakarta, Surabaya (East Java), Yogyakarta and Bandung (West Java) to anticipate the growth.

DaimlerChrysler has set its sales target at 2,000 to 2,500 cars this year, 40 percent of which are CBU. "We have imported 900 CBU cars so far," said the company's corporate communications manager, Wim Ekel.

Marketing manager of General Motors Indonesia Paulus B. Suranto said the company predicted 500 of its CBU Opel series would be sold this year.

Protests

The arrival of the cars has not been welcomed by all. Dozens of young people, calling themselves the Anti-luxury Car Movement, staged a demonstration in front of the Ministry of Industry and Trade last month to demand the government ban the imports.

Angky disagreed with their protest, but admitted the cars showed the vast socioeconomic gap.

"It is true, what can you say? Moreover, there can't be uniformity here. Do you think that it is a communist country where everything should be uniform?"

Rapid sales were made during the expo. For instance, in the first two hours after the grand opening, Toyota recorded 10 transactions.

A staff member at the Isuzu stand carefully counted a wad of Rp 100,000 bills from customer Kusnanto, 55, as the advance payment on an Isuzu Panther High Grade type.

"I have six cars but it's not enough. I have seven children," said Kusnanto.

"Higher class" automakers also enjoyed good business. Peugeot had four transactions and Audi one.

Riza M. Rinaldhy, sales and marketing manager of PT Grandauto Dinamika, the sole distributor of the British-made Jaguar, said dozens of people requested a test drive of the model, which costs more than Rp 1 billion each, although none were confirmed as buyers.

"They are our prospective customers, that's why we will have the test drives after the expo," he said.

Still, how do the owners keep their coveted cars out of harm's way with the busy traffic and bad infrastructure in the capital?

Angky said he never faced difficulties with other vehicles, including public transportation.

"Thus far, other drivers are always tolerant toward luxury cars. Most of the time they make way for me," he said.

Maryono William, who owns a CBU Toyota Land Cruiser V8 type and is ordering a Mercedes-Benz SLK series, said he used the vehicle only to travel from his home in Kebayoran Baru, South Jakarta, to his car showroom in Pecenongan.

"Most CBU cars have better suspension systems so it won't be a problem if passing along damaged roads," he said.

An expert on traffic management from the University of Indonesia, Alan Marino, countered that the country's roads were still not the place for the vehicles.

"For example, we know that traffic jams are still everywhere here so that cars with high capability, like high speed power, won't be functioning (optimally) here," he said.

"All I'd like to say is that a person who owns a luxury car here is like a woman wearing expensive clothes and accessories in a public minivan -- it's totally unsuitable."