New Blazer leads expanding SUV market

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.