Nissan sees drop in RI car demand

Nissan sees drop in RI car demand

TOKYO (Reuters): Japanese car giant Nissan Motor Co Ltd said yesterday it expects total vehicle demand in Indonesia to fall about 70 percent in January compared with the same month last year.

"Overall (vehicle) demand in Indonesia is sliding about 70 percent," Yoshi Iwashita, general manager in charge of Nissan's Asia and Oceania Operations Division, told Reuters in an interview.

He said the fall in demand, resulting from the economic and currency crisis in Indonesia, may not cause a major cutback in Nissan's output in Indonesia, as this remained relatively small compared with that of other major carmakers, such as Toyota Motor Corp.

Iwashita said Nissan's annual vehicle production in Indonesia stood at around 5,000 units.

On Monday, a Nissan spokesman warned that the firm's Indonesian unit, which produces vehicles using kits imported from Japan, could halt production if the worst came to the worst.

"We will have to decide what to do at the Indonesian unit because of Indonesian economic conditions. We must consider it (the Indonesian output) urgently," the spokesman said.

Indonesia's currency has weakened by about 80 percent against the dollar in the past six months.

Asked whether the economic woes would cause any delay in operations of the Nissan's new engine production joint venture in Indonesia, Iwashita said: "We are taking a wait-and-see stance...I cannot tell you anything clearly now."

He said uncertainty remained as to the political situations in both countries, making it difficult for Nissan to make any concrete decision right now.

In December, Nissan said it would set up an engine production joint venture in January, in which it would takes a 51 percent stake. It said the Jakarta-based Indomobil Group would take a 30 percent stake, while the rest would be owned by a subsidiary of Malaysian automaker Tan Chong Motor Holdings Bhd.

The venture is due to start building a plant in early 1998.

Iwashita said that although it was widely expected that it would take about three years before a recovery was seen in the economies in Indonesia and Thailand, everything was still up in the air concerning the future economic climate.