New Blazer leads expanding SUV market
By John Aglionby
"Never believe anything until it has been officially denied," is the advice given to an incoming minister by his private secretary in the British comedy TV series Yes Minister.
That is almost the reaction when, rather than cutting back production schedules at the moment, PT General Motors Buana Indonesia (GMBI), the local arm of General Motors European operation Opel, is almost breaking sweat to meet demand.
Last week, 16 Blazers were rolling off its assembly lines every day.
This may not be the case for much longer as GMBI raised its off-the-road prices by about 12 percent last week. The SLi Blazer went up from Rp 62.4 million (US$7,800) to Rp 71 million, the DOHC version is now Rp 82 million and the LT Rp 91 million. This raise is the third in the last six months. Prices went up by 2 percent in August and 4 percent in November.
"We are able to keep our price increases lower than many of our competitors because our local content is so high," said GMBI marketing director Terence Johnson. At July 1997 levels, it was 45 percent in dollar terms.
Prices are likely to go up again in March, after the launch of the new 1998 Blazer that was unveiled at the Detroit Auto Show. GMBI is giving little away on this until the launch in February. From pictures, the new vehicle looks little more than just a facelift of the current model but Johnson insists: "It represents an improvement in many areas and uses a different engine technology."
Changes include a wider look, elongated halogen lamps giving it what the company describes "a shark predator look", completely new bumpers, side molding, engine chassis and breaking system.
GMBI president Bill Botwick is confident the new Blazer will consolidate the vehicle's position as the leading sport utility vehicle in Indonesia, in terms of market share. It achieved this status for the first time last year, increasing sales from 3,193 to 3,758 and a market share from 33 percent to 36 percent.
"This year we'd like to see our share increase to as much as 40 percent if possible," Johnson said.
"But we've got no idea of what the total market volume will be. It's too early to read what's happening now."
GMBI considers everything from the Blazer and Nissan Terrano to the Mitsubishi Pajero and Toyota Land Cruiser as being in the sport utility vehicle (SUV) category, even though the latter two are at least two-and-a-half times the price of the Blazer.
Herman Latief, vice president director of Mitsubishi distributor PT Krama Yudha Tiga Berlian Motors, does not see the Blazer and Pajero as competitors. "The class and performance are completely different. It's like PT Timor Nasional, they claim they're the leader in their segment but people know the reality."
He said Mitsubishi sold an average of 25 cars to 30 cars a month last year.
The corresponding figure for the Toyota Land Cruiser was 125, and 190 for the Nissan Terrano.
One source of competition disappearing from the market is the Mercedes G Class, although at more than Rp 300 million on the road it was even less of a competitor to the Blazer.
PT Star Motor's marketing director, Friedel Engisch, said that production had stopped and the last 32 cars had already been ordered from the company's plant.
"We will be replacing it with the M Class, which is really a totally different segment," he said. "The M Class caters more to the customer's desires, whereas the G Class is a vehicle whose quality is only limited by the quality of the driver.
"Ninety percent of drivers are not professional enough to get the best out of the G Class. So, while the M Clss will only have 80 percent of the G Class engine quality, the remaining 20 percent will only have been needed by 1 percent of users."
Unfortunately the M Class is unlikely to be available this year, unless the economic situation improves dramatically, but at least it shows that Mercedes is determined to try and pierce Indonesia's ever-expanding SUV market.