More new names to enter the car market this year

More new names to enter the car market this year

I. Christianto, Contributor, Jakarta

Concerns over possible unrest in the upcoming national
elections are likely to slow the high growth in the country's car
market this year.

Sedans will be the most affected by the projected slower
demand while sales of Multi-Purpose Vehicles (MPVs) are expected
to continue to increase thanks to the entry of several new names
in this particular car market.

The Association of Indonesian Automotive Manufacturers
(Gaikindo) estimates the total growth of car sales will increase
only by about 10 percent this year to between 380,000 and 390,000
units. Last year, sales rose by 19 percent to 354,333 units.

Though several analysts have forecast the country's
legislative elections in April and the first ever presidential
election in July will not involve serious threats to peace and
order, many people remain cautious ahead of the polls.

In the past, Indonesian elections have sparked political and
social unrest, and many continue to worry that political tensions
can trigger similar violence this year. Consequently, there is a
degree of wariness causing weaker growth in new vehicle sales
this year.

According to the association, sales of MPVs are predicted to
increase by 5 percent this year, far better than the zero growth
last year. Sales of mid-priced sport utility vehicle (SUV) will
also be positive, but not for sedans.

Factors such as a better economy and enhanced security, stable
fuel prices, lower inflation, lower interest rates and the
rupiah's relative stability are among the things that will
encourage people to buy MPVs. However, some people, mostly those
who can afford sedans and high-priced cars, are still very
worried about possible security impacts during the electoral
process.

Last year, the stars of the market were sport utility
vehicles (SUVs), commercial cars and mid-class sedans. This year,
because of the potential for political problems, sales for mid-
class vehicles are not expected to be very huge.

Demand for new sedans normally decrease when consumers are
concerned about security. Nonetheless, such a condition will not
deter carmakers from launching new models in Indonesia this year.

Last year's higher demand in the segment was mostly fueled by
sales of subcompacts, or 1,500 cc vehicles, and the competition
for SUVs, such as the Suzuki Baleno Next-G, All New Honda City
and Toyota Vios. There was also a healthy rivalries between the
Suzuki Escudo 2.0 and Escudo XL7, Ford Escape 2.0, Mazda Tribute
2.0, Honda CR-V and Nissan X-Trail, all of which drove the market
due to greater promotions to win market share.

This year the lower priced MPVs are predicted to lead the
market. Such MPVs include the Toyota Avanza and Daihatsu Xenia,
which set prices under Rp 100 million (US$11,900), which quite
obviously entices new buyers.

In addition to Avanza and Xenia, soon there will also be the
Every and Picanto from Suzuki and KIA, respectively, to compete
in this segment, and possibly drive prices lower still.

The existing players in the minivan sector with engine sizes
below 1,300cc include the Carry and Karimun (also from Suzuki),
Spark by Chevrolet and Daihatsu Ceria.

Other top carmakers are also planning to introduce less
expensive MPVs. This includes Honda, which plans to introduce the
Jazz after launching the new Stream, which can accommodate seven
adults comfortably within its clean, contemporary shell. It also
boasts a 2.0 i-VTEC engine to guarantee an exhilarating ride.
Meanwhile, the Honda Jazz will seat five adults comfortably.

Leading carmakers, nonetheless, will keep introducing
luxurious cars in Indonesia. For instance, PT Garuda Mataram
Motor, the sole distributor of Audi here, has plans to market
more Audi A8s. The car is pure luxury in an all-wheel drive
package dubbed Quattro.

This aluminum-bodied sedan competes with the BMW 7 series and
Mercedes Benz S-Class, Jaguar XJ and Infinity Q45.

Meanwhile, PT BMW Indonesia has also introduced the BMW 730
Li, which offers the best and latest cutting-edge technology for
ultimate driving comfort. Its iDrive system offered the driver
valuable information such as car service status, climate control,
communication options and entertainment at a touch of a button.

The BMW 730Li is equipped with six-speed steptronic automatic
transmission, a sunroof and a car telephone as well as a self-
leveling system to maintain the car's height under all load
conditions.

BMW will also unveil its X3. The X3 is underscored by
the developed intelligent xDrive all-wheel-drive system which
ensures the variable distribution of drive forces between the
front and rear axles more quickly and efficiently than ever
before. Referred to as sport activity vehicle (SAV), the car is
powered by a six-cylinder DOHC.

Volvo is introducing XC90 T6, a sport-utility with a twin-
turbocharged six-cylinder engine. Power reaches all four wheels
through constant all-wheel drive through a four-speed automatic
transmission with a manual shift mode that Volvo calls
Geartronic.

Through PT Car & Cars Indonesia Volkswagen will also introduce
the New Golf and Tuareg, the first sport-utility from VW later
this year.

All in all, the automotive sector in Indonesia still should
grow this year, albeit a bit slower. It is estimated that the
major players in new passenger and commercial vehicles will
remain the established brands including Toyota, Mitsubishi,
Isuzu, Suzuki and Daihatsu.

Last year, in the sedan category, Toyota leads in the market,
followed by Honda, Hyundai, Suzuki, Mercedes Benz, BMW,
Mitsubishi, Timor, Ford, Volvo, Chevrolet, KIA, Jaguar, Peugeot,
Audi, Daewoo, Nissan, Mazda and Volkswagen. Leaders in the non-
sedan sector were Toyota, Mitsubishi, Suzuki, Daihatsu, Isuzu,
Honda, Nissan, Hyundai, KIA, Hino, Ford, Chevrolet, Peugeot,
Nissan Diesel, Mercedes Benz, Mazda, Volkswagen, Renault,
BMW, Ssanyong, Land Rover, Daewoo, Perkasa, Volvo,
Subaru, AMC Jeep and Audi.