Teasing the market

Teasing the market

JAKARTA (JP): The automotive industry, much like the
electronics industry, thrives on its ability to persuade
consumers to purchase new products despite having older versions
that run perfectly well.

Dealers seem to have a way of convincing people that even if
their car is still comfortable, they need a new make which boasts
more superior features.

A good example of the nature of the industry in relation to
this pertains to the owners of the Suzuki Escudo and Vitara.

Indomobil, an agent for the four-wheeled Suzuki, is banking on
the possibility that owners of the jeep-like vehicles have had
enough of driving them after four or five years.

It is now persuading them to replace their cars with the
latest Escudo 2.0.

These owners represent a good market as, other than being
short of money, they have no reason not to buy a Escudo 2.0.

This is because technically, the earlier version of Escudo,
which was made five years ago, is now past its used period.

Besides, those who received the car through a perk or company
benefit would be ready for a new car.

The market of the new Escudo 2.0, however, has actually
expanded by the marketing activity of rivals, such as the Honda
CR-V. The distributor of the latter had for some time been
engaged in a massive promotion campaign of the product, but
recently disappointed customers by imposing a waiting period even
after they had put down deposits.

Customers' disappointment might have benefited the dealers of
the Escudo, which is more or less in the same class as the Honda
CR-V, as it meant that it would now have a ready market to
target.

This is why the dealer has decided to sell the Escudo without
customers going through a waiting period.

We have yet to see the outcome of the current "war" between
the Escudo and Honda CR-V, which both offer some common features.

First, they are both multipurpose vehicles (MPVs) or family
wagons, a trend that was first started in Indonesia by the Toyota
Kijang.

Second, the two cars have steel frames to protect passengers
from strong impact. This is called double impact protection.

The Opel Blazer also boasts this feature.

Escudo, however, is considered a "real jeep" because it uses a
jeep chassis while the Honda CR-V does not. The two cars,
however, are reportedly fit and comfortable for use both off-road
and on paved city streets.

Which one seems to have the greater chance at winning the
contest?

In market competition, a product that spurs strong customer
loyalty usually prevails.

This is why we hear about people collecting Mercedes Benzs,
BMWs, Opels or VW Beetles.

If customer loyalty is the benchmark with which we are to
judge the contest between the Escudo and Honda CR-V, we would see
that the market share of the two cars has not changed much from
what it was several years ago.

But not all customers here have a strong loyalty toward
certain brands.

Another factor to consider is that the automotive market in
Indonesia has for the past 18 years been shifting from vans or
minibuses to the MPV.

What remains unclear is whether the shift has been caused by a
changing preference of the customers or because the car
manufacturers have been flooding the market with the vehicles.

The new frenzy for MPV cars might have been started with the
entrance of the KIA Carnival into the local market.

As many as 6,000 Carnivals were sold annually while sales of
the Caren, also from the same manufacturer, reached 4,000 cars a
year.

This achievement was enough to boost the manufacturer's
confidence to project a sales growth of 30 percent from last
year's figure.

In addition, MPVs from other companies, such as the Hyundai
Trajet, Peugeot 806, Honda Odyssey, Toyota Picnic, Chevrolet,
Zafira, Volkswagen, BMW and Mercedes Benz have now entered the
market here.

How long will this trend last? That is a difficult question to
answer because most Indonesians prefer to have cars that can
transport a number of people at the same time -- something that
is more easily done by an MPV than a sedan.

This explains why the Kijang has remained a favorite for over
20 years. Earlier, minibuses were the favorite though they were
not as comfortable to ride in as the Kijang.

Paulus B. Suranto, however, has detected a new trend in the
offing. He said the sedan, or mini cars under 1500 cc, have
started to penetrate the market and found enthusiastic followers.

Less than three years ago, only a small number of consumers
were interested in the mini. "Producers should really respond
to this new interest," he said.

Car of the future

People-carrying vehicles appear set to remain a favorite, but
with additional sophistication, such as computerized components,
including the global positioning system (GPS).

One of the most successful features has been the replacement
of the carburetor with an injection ignition system.

It is believed that the installation of electronic devices
will grow with time, though, of course, questions remain over the
usefulness of the gadgets.

The attempt to install a TV in the car, for instance, was
considered a flop not only because the sets were of poor quality
but they also had poor reception as the antennas usually did not
function well unless they were inert.

All these ideas were developed to increase the comfort of
passengers and drivers. One tire manufacturer, for instance, has
reportedly been developing a mechanism to gauge a decline in air
pressure in tires even when the vehicle is in high speed.

The gadget sends signals to the dashboard panel if the tires
need to be pumped.

This would be an important innovation as a comfortable ride
depends also on the tires' air pressure. Presently, only
experienced drivers can tell the difference in air pressure in
tires without the assistance of a tire gage.

Another major invention in the automotive technology is the
installment of the Internet and telecommunications facilities in
a car, enabling motorists to keep abreast of the latest
information development through the global positioning system.

A driver would, for instance, be able to locate the nearest
gas station or restaurant with the automatic vehicle location
feature.

This device would even help drivers find areas with less
traffic. And more importantly, if the car were ever to go
missing, the owner would be able to track it down with the help
of a satellite.

Of foremost importance, however, is the fact that consumers
want to feel that they are driving rather than being driven by an
automatic vehicle.

This means that even though technology will some day enable a
car to move without a steering wheel, most people will still want
one.

Driving for them always means sitting behind the steering
wheel with their two feet controlling the gas and brake pedals.

Those three functions will need to be maintained, regardless
how sophisticated the automotive technology will become.

But we look forward to the birth of a family car equipped with
a computer and the automatic vehicle location using the global
positioning system.