Volvo's focus on Asian marts augers well for Indonesia

By Russell Williamson

VOLVO will add a new stretched version of its 960 luxury sedan to its Indonesian lineup as part of a push to further expand its market share in the region.

The local distributor, PT Central Sole Agency, a subsidiary of the Indomobil Group, is expected to begin selling the 960 Executive early next year.

The car will join the other two 960 models, the 2300cc four- cylinder 960GL and the 3000cc six-cylinder 960 Royal, together with the 2400cc five-cylinder 850GLT.

The 960 Executive is powered by the same straight six as the 960 Royal driving through a four-speed automatic transmission but features a body which has been stretched, offering the rear seat passengers 18cm more legroom.

The addition of the Executive to the Volvo product range in Indonesia is part of an effort by the Swedish manufacturer to increase its sales in the Asia-Pacific region from about 20,000 cars this year to between 45,000 and 50,000 by 2000.

According to the head of Volvo Car Asia Pacific, William Hoover, Indonesia, together with South Korea and the Philippines, are particular markets which Volvo will focus on to provide a substantial proportion of this increased volume.

Despite a downturn in the Indonesian car market this year, Hoover is confident that Volvo will be able to reach its sales targets for the future.

"For a product like Volvo, which will always be somewhat of a niche product, we don't need fairly dramatic market growth in order to look at realistic volume increases," Hoover said.

He said most of the region's economies were continuing to grow and even when they did cool it was only down to about 5 percent or 6 percent which was still sufficient to maintain a steady increase in the car market.

"There is also a kind of a growing sophistication of new car buyers so that within the luxury car segment there are enough opportunities to support our volume ambition," Hoover said.

He also said that the addition of the smaller 1800cc to 2000cc S40 and V40 to many of the Asian markets next year would provide incremental volume and significant growth.

The S40 is a medium-sized four-door sedan while its sibling V40 is a five-door wagon built on the same platform.

Both cars have already gone on sale in Thailand -- assembled from completely knocked down kits -- although it will be at least 1998 before they find their way onto the Indonesian market.

While Hoover sees the potential of the Asian markets, he said the company will still have a way to go to build up the profile and image of Volvo to enable it to compete effectively with the likes of Mercedes and BMW.

In Europe, the marque has a long standing image of building cars that are extremely safe and environmentally responsible and these are a couple of the factors the company will continue to promote in Asia.

"Volvo is still known as a quality European car and as such carries a level of prestige, with part made up of safety and part just because it is a good quality European car of a certain size and stature," Hoover said.

"Also, if you look at pricing, you find that the price tag alone says that this is a prestige car doing business in a circle of a relatively small number of competitors.

"As we evolve the brand here, the position that Volvo will occupy is that there are any number of cars that could demonstrate you wealth but there is a car that can demonstrate your wealth, your intelligence and your sense of responsibility.

"In the target group that Volvo and Mercedes and BMW are looking for, there is probably a growing concern about safety and personal security and even environmental concern," he said.

Hoover said there was also a lot that could be done to promote the corporate image of Volvo within the region.

"There is an opportunity for us as well not just in terms of positioning the product but also positioning the Volvo name as the company that is concerned about transportation solutions whether that be highway design or signage or other such things," Hoover said.

"We have looked at doing public seminars in conjunction with local authorities on road safety and environment, where we can begin to raise the level of consciousness about these issues without coming across as preaching to people," he said.

In order to further the company's ambitions in the region, Volvo expanded its office in Singapore on July 1 to take on a greater degree of responsibility.

"The expansion of the office was to give the region the type of focus that we feel it now needs in terms of planning the infrastructure required to move the volume from 20,000 to that of the 40,000 range," Hoover said.

"It will also develop an industrial strategy that would support first that initial step but also the longer term to support a manufacturing presence in the area," he said.