Short-term survival the priority for local carmakers

Short-term survival the priority for local carmakers

By John Aglionby

GOVERNMENT ministers struggling with limited job security,
International Monetary Fund economists stuck between the beads on
their abacus and numerous visiting dignitaries have spent all
week talking up Indonesia's long-term economic prospects.

Unfortunately, the short-term has to be overcome first and in
this department, the doom and gloom merchants definitely have the
upper hand.

Particularly in the automotive industry, where vehicle sales
are expected to plummet from last year's record of almost 400,000
to little over half that.

"We are not thinking about anything other than survival at the
moment," said Jongkie Sugiarto the president director of PT
Bimantara Cakra Nusa.

"Of course we are still thinking about new products but we
have no idea when we might be able to introduce them."

Friedel Engisch, the marketing director of PT Star Motors
Indonesia, the sole distributor of Mercedes in Indonesia, said
his company was looking to bring in the company's new
recreational vehicle, the M Class "as soon as possible".

"However I'd be lying if I said it will definitely be here by
the end of the year," he added. And that's still 50 weeks away.
Mercedes has stopped all production at its Gunung Putri assembly
lines until Feb. 9, to give the markets a chance to stabilize.

Nissan is facing problems of an equally unsettling nature. A
company spokeswoman said: "The situation at the moment is still
very unstable.

We are not even confident enough to continue production at the
moment because of the situation," referring to the company's
sport utility vehicle the Terrano.

And one of its cars that is still available, the Infiniti,
powered by a 3.0-liter, 24-valve, DOHC V6 engine, has increased
in price by more than 36 percent since its launch in the middle
of last year.

At least the above companies are still talking about what they
are intending to do, or not as the case may be. PT Astra is not
willing to do that. Marketing Director Nabuharu Tabata is not
prepared to discuss Toyota's prospects in Indonesia in the months
to come at all.

Herman Latief, the chairman of the Association of Automotive
Industry Manufacturers, summed up most industry executives'
feelings when he said: "The economic and political uncertainty is
such at the moment that we want to see how we come out of the
first three months of the year.

"By then, we'll be able to see the sales trend and make
adjustments to current predictions. It would be premature to make
any long-term predictions now."

One piece of slightly less miserable news, according to
Herman, is that December's sales -- of around 18,000 vehicles
nationwide -- were not as bad as he feared they might have been.

"There's no major single reason for this but part of it could
be that because the dollar is changing so much and people can't
buy dollars any more, they are buying cars."

He accepted, however, that sales this month would probably be
down on December.

"People are waiting to see what the effects of the IMF
negotiations will be and also few people buy cars during the
fasting month. They usually wait until afterward to do so."

So, not only is new product likely to be rare in the immediate
future, production of many older products will also be limited.
The only benefit of all this, it seems, is that the rate of
increase of congestion on the country's roads will hopefully
level out or even decline a bit.