Rini Soewandi revs up Indonesian motorcycle industry
JAKARTA (JP): Rini M.S. Soewandi, one of Indonesia's highest paid professional managers, has plunged some of her own money into a new motorcycle manufacturing start-up to challenge Japanese giants and cheap Chinese imports early next year.
The former CEO of PT Astra International announced on Friday that her Kanzen motorcycles should start coming off the production lines in February.
PT Semesta Citra Motorindo, the $5-6 million company which is to produce the motorcycles, hoped to produce and sell 66,000 units in 2001, or 5,500 units per month, Rini said.
"If I wasn't sure, I would not have invested so much time and resources," she told reporters at a ceremony marking the signing of a memorandum of understanding between her company and the Agency for Technological Research and Application (BPPT).
Rini, who is the chief commissioner of Semesta, holds a 60 percent equity stake in the company.
Under the five-year contract, BPPT, a government research agency, will undertake the research and development of motorcycle engines for Semesta.
Indonesia's motorcycle market has rebounded this year with total sales likely to exceed 800,000 units, more than double the 1999 figure. Annual sales reached 1.8 million units prior to the 1997 financial crisis.
The Indonesian market has long been dominated by Japanese makes such as Honda, Yamaha, Kawasaki and Suzuki. But over the last two years, the domestic market has been flooded by more than 40 Chinese makes. Chinese imports now account for more than 20 percent of the market.
Rini said Kanzen would be competitively priced against Japanese brands, but not against the Chinese imports.
While Semesta could not undercut Chinese prices, Rini said she hoped to gain an edge through quality, noting that some of the new and cheaper motorcycles currently on the market were of poor quality.
Semesta will launch three different motorcycles in February, all prized at less than Rp 10 million, she said.
Kanzen had been developed with the help of the BPPT on an informal basis until Friday, when the arrangement was finally formalized.
Rini disclosed that she and the BPPT deputy chief of design engineering technology Said D. Jenie, who is helping in developing Kanzen, went back a long way together, to their college days in Boston, Massachusetts, in fact.
She conceded that Semesta's success would depend to a large extent on BPPT helping to develop its products.
"Setting up a motorbike plant is a huge undertaking in terms of the investment in research and development that is required," she said.
Semesta has outsourced this part of the work to BPPT, specifically the agency's Laboratory for Motor Thermodynamics and Propulsion Systems. (03)