Mercedes-Benz to raise revenue by 6.2 percent

MEDAN, North Sumatra (JP): Mercedes-Benz Group Indonesia expects its revenue to increase 6.2 percent to Rp 850 billion (US$352 million) this year from Rp 800 billion in 1996, the group's president Frank Messer said over the weekend.

"Last year, we had a small profit due to the tough financial situation in 1995," he said in a ceremony to present the 1996 Dealer of the Year Award to PT Bintang Cosmos Medan.

He refused to say what the group's profit was last year but said that this year's before-tax profit might reach Rp 25 billion.

The group would invest about Rp 20 billion this year, mostly to build facilities to produce MB 800 trucks, he said.

"We plan to produce about 1,100 MB 800 trucks this year," he said.

He said local production of MB 800 trucks would increase to 5,500 units yearly, some of the trucks would be exported to Nigeria, Vietnam, Argentina and Brazil.

MB 800 trucks, he said, would replace the MB 700 series, which faced tough competition from Mitsubishi which dominated the market for trucks of between five and 10 tons.

"About 30 percent of MB 800 will use local components," he said.

According to the Indonesian Automotive Industry Association, Mercedes-Benz's MB series also faces tough competition from vehicles of 10 tons to 24 tons -- Mitsubishi controls 46.5 percent of this market segment. It sold of 4,742 such vehicles locally last year. Mercedes-Benz sold only 555 MB trucks last year.

But Mercedes Benz Group had maintained its position as a market leader for buses and luxury sedans, Messer said.

In 1996, the group sold 1,102 buses locally, or 47.6 percent of that market segment. The second largest market share was held by Hino of Japan with the sale of 751 buses, followed by Mitsubishi with 240 buses.

Messer said market trends varied greatly across Indonesia. In Jakarta, for example, about 70 percent of the vehicles sold by the group were passenger cars.

The group led the market for sales of sedans of 2000 cc and over last year by selling of 2,220 the cars, 34.3 percent of the country's total sales of 6,474 the cars.

The automotive industry association said that 40.5 percent of the 370,000 vehicles sold locally in 1996 were sold in Greater Jakarta.

The president of Bintang Cosmos Medan, Tony Nauli Basa, said his company sold about 500 Mercedes-Benz vehicles in North Sumatra and Aceh last year, and 40 percent of them were passenger cars.

He said that North Sumatra and Aceh, which were near Singapore and Malaysia, were a good market for commercial vehicles used to transport goods. (10)