Luxury cars a coveted commodity

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."