Suzuki cheap MPV enters market

Tony Hotland, Jakarta

Competition among car manufacturers in the popular multipurpose vehicle (MPV) market segment will surely get tougher after Suzuki launched on Friday its newest model, Suzuki APV, which carries a price tag of below Rp 100 million (about US$11,025).

Soebronto Laras, president of PT Indomobil Suzuki International, a unit of the Indomobil Group, the second largest carmaker here, stated that the new line was to counter rivals Toyota Avanza and Daihatsu Xenia, which drew strong interest from the public when launched early this year.

Both the Avanza and the Xenia are produced by the country's largest auto assembler and distributor, Astra International, and also carry a low on-the-road-price of below Rp 100 million.

"The presence of Avanza and Xenia has boosted the sales portion of cars priced Rp 100 million to 76.7 percent of total car sales (in the first half of this year). Last year, growth in the (MPV) segment was quite slack," Soebronto said during the launch of the Suzuki APV. The MPV segment here has been dominated by vans such as the popular Toyota Kijang.

Data from the Association of Indonesian Automotive Manufacturers (Gaikindo) shows that about 354,578 cars were sold nationwide last year, up 11.6 percent from 2002.

The figure is estimated to rise to around 440,000 by the end of this year.

Soebronto said there was vast room for growth of low-priced cars in the country, considering that the economy was still developing and the huge market of more than 220 million population.

The orders piling up for Avanza and Xenia are solid proof of how attractive the market is and prompted Suzuki to produce a similar model, although Indomobil claims that the new car performs better than its competitors.

Both Toyota and Daihatsu claim that at least 30,000 orders for their new models were received just a week after being launched, and there is still a long waiting list, with back orders pending up to 2005.

The car producers are competing to grab attention not only in the domestic market, but also in the foreign market.

"We plan to export between 25,000 to 35,000 to countries within the Southeast Asia, Middle East and South America," Soebronto said.

Suzuki has invested about Rp 2 trillion to support its plan to produce 70,000 of the new model annually. The cars will become available in September.