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.