Sat, 13 May 2000

Luxury imported cars dominate automotive expo

JAKARTA (JP): Expensive cars are dominating the automotive show currently being held at the Jakarta Convention Center as local demand at the high end of the market is growing.

Most of the cars are brought into Indonesia in completely built-up (CBU), and are becoming more popular with the wealthy. Popular makes include Mercedes Benz, Ferrari, Audi and BMW, while many others are on display.

The imported vehicles are mostly offered in rupiah, with prices ranging from Rp 170 million (US$21,250) for KIA's new 1,800cc sedan Shuma to Rp 2.3 billion for the Ferrari 355fi.

Only Land Rover's authorized dealer, PT Java Motors, offers its imported Jeeps in U.S. dollars, ranging from $58,000 to $150,000 per unit.

The new models of the locally assembled Honda Accord Exclusive, Toyota Soluna, Daihatsu Taruna and Suzuki Karimun are also on show.

Luxury car importers participating in the event said the market for expensive imported cars remained promising, despite the fact that many Indonesian people were still suffering from the economic crisis.

Wealthy customers have no qualms about spending a great deal of money to get their preferred cars, they said.

The Association of Indonesian Automotive Industries (Gaikindo) estimates that about 2,000 units of imported CBU vehicles were sold in March and April, compared to an average 1,000 units sold per month in the precrisis period.

PT Terminal Automotive, an authorized dealer of the imported KIA cars here, said the demand for its products was positive and that since February it had been selling about 30 cars priced between Rp 170 million and Rp 265 million per month.

Sanny, a representative of Sanggar Mobil, one of several luxurious car importers specializing in Mercedes Benzes and the new VW Beetle, said some of the visitors had seriously considered buying the cars although no one had come to a decision so far.

He said buyers were careful when choosing the importers they would buy the cars from, because they wanted to make sure the cars were legally imported and came with all the necessary documents.

"This is sort of a black market in a sense ... that we sell cars which are not officially displayed in a showroom, but in small advertisements in newspapers," he told The Jakarta Post at the showground.

Another luxury car importer said that although most of the importers brought the cars into the country legally they did not provide after sales service or guarantees.

"Our business is car importation only. Maintenance and repairs are handled by the authorized importers or existing car repair centers," he said.

He said people insisted on buying imported CBU cars because the vehicles were totally different from the luxurious locally assembled ones.

However, many of the authorized importers and repair centers refused to handle cars imported by general importers, according to the operations director of PT Java Motors, Andi Kosala.

"It is not that we are against general importers, but we cannot be responsible for cars that are not imported by the authorized distributors, some of which were not designed for the Asian market," he said.

He said some repair centers would handle cars bought from general importers, but would charge more and give no guarantees.

Fewer than 50 general importers have rushed into the luxury car import business since the government liberalized the country's car imports earlier this year.

The importers reportedly sell between five to 17 luxurious cars each per month and make an average of Rp 20 million in profit.

According to Gaikindo, total domestic car sales in the first quarter of this year increased to 51,169 units from 578 units sold in the same period last year.

Total sales of domestic cars this year are expected to reach about 240,000 units as against 94,000 units sold nationwide last year. (cst)