Opel offers incentive to reinforce sales

Opel offers incentive to reinforce sales

JAKARTA (JP): Opel has launched a new incentive program --
5,000 liters of free gasoline and three years of free servicing
and spare parts for every Blazer car purchased -- to boost
flagging sales in the country's sluggish automotive market.

Terence B. Johnsson, the director of sales, marketing, service
and parts of PT General Motors Buana Indonesia, said yesterday
the program would enable the company, maker of Opel cars in the
country to boost sales, which had dropped significantly.

"We expect sales to pick up at least by 25 (percent) to 30
percent," Johnsson told reporters after the program's launching
ceremony.

Opel sales dropped about 55 percent in the first four months
of this year to 665 vehicles from 1,509 in the same period last
year.

He said the company wanted to ease the customers' burden by
covering the soaring prices of fuel and spare parts.

"People have enough to worry about with their budgets and
rising prices," he said.

The incentives package would encourage people to choose a
Blazer rather than other brands of cars, he said.

For example, somebody who wanted to buy a new car costing Rp
55 million might now instead go for a Blazer which cost about Rp
140 million because they would not have to pay for spare parts
and gas, he said.

Johnsson admitted that Opel's market had shrunk as the crisis
worsened, following the 75 percent drop in domestic car sales
this year.

While car prices had more than doubled, customers incomes had
stayed the same or even shrunk, he said.

In July last year, for example, a Blazer might cost about
seven to 10 times an Opel customer's monthly income, he said.

Prices of Opel's vehicles have risen 80 percent since December
last year.

Opel produces 2,200cc Blazers and 1,800cc Optima sedans in
Indonesia. These range from Rp 116.5 million (US$8,300) to Rp
150.5 million.

Johnsson said that despite the sharp rise, the cars' cost in
dollars had dropped, due to the rupiah's depreciation against the
dollar since July 1997.

"For example, if our Blazer cost $25,000 last year, it now
costs only $15,000," he said.

The company's production capacity had also dropped
significantly since the end of last year.

Opel now produces about 16 Blazers a day, compared to 22
Blazers a day last year, he said.

The company had to let go 45 percent of its expatriates, 20
percent of its hourly workers and 20 percent of its permanent
staff last April as it cut production, he said.

But Johnsson said the company would continue its business in
Indonesia, despite the deepening crisis.

"We are here to stay, as we just bought 100 percent ownership
in the company," he said.

"It is good to invest when prices are low," he added.

The incentive package offer is good until August 31, 1998.
Customers will be given vouchers that can be exchanged with
gasoline at all fuel station.

A one-year service extension program is also being provided
for existing Blazer owners. (das)