Truck sales to remain slow next year

The Jakarta Post, Jakarta

Truck sales are expected to remain weak next year with businesses still concerned about the country's economic and political situation, especially with the 2004 general election approaching, according to an industry executive.

Gunadi Sindhuwinata, president of PT Indomobil Sukses International, said on Friday truckmakers in Indonesia expected to sell 300,000 trucks in 2003, about the same number expected to be sold this year.

"The stagnant growth is attributed to concern over the political situation next year ... ," Gunadi said.

He was speaking at a press conference to mark the 20th anniversary of truck manufacturer PT Hino Indonesia Manufacturing's operation in Indonesia.

Japan's Hino Motors Ltd. holds a controlling 60.2 percent stake in Hino Indonesia, while Indomobil is the second largest shareholder with a 20.6 percent stake.

Gunadi said businesses would be discouraged from purchasing new trucks if the outlook for the country's political situation ahead of the general election was shaky.

He added that as the country had yet to fully recover from the economic crisis that began in the late 1990s, many companies were still postponing plans to invest in new trucks.

Hino Indonesia also announced that it would split into two companies in a bid to boost efficiency amid increasing competition as a result of the regional free trade area.

The first company will retain the name PT Hino Indonesia Manufacturing. It will be spearheaded by Hino Motors Ltd. and will focus on manufacturing trucks and buses.

The second company, to be called PT Hino Motors Sales Indonesia, will be spearheaded by Indomobil Sukses and will handle the marketing business.

"The split will allow both Hino Motors and Indomobil to compete in their respective areas of core competence," said Gunadi.