Volvo's Indomobil and PT Timor delay new cars

By John Aglionby

VOLVO and PT Timor Putra are two companies at opposite ends of the automotive spectrum.

The former is a European heavyweight with a long history of producing safe, reliable, comfortable and respectably performing cars, the second is Indonesia's national car.

However, horror of horrors, believe it or not, they have something in common. And it is something neither is particularly proud of nor willing to talk freely about.

Both had plans to bring new models into the Indonesian market and both have had to delay their launches.

Volvo, through its distributor Indomobil, was due to unveil its V70 this weekend but is postponing it for reasons that are not yet clear.

Senior executives were unavailable to comment this week, and a company spokeswoman was only willing to give a vague explanation.

"We cannot say when it will be launched," she said.

"Managers are still discussing the details of the operation and until they make their final decision, we do not know when the V70 will be available in Indonesia."

So, it is a case of having to wait and see.

The V70 is by no means a guaranteed winner in the Indonesian market -- being an estate -- although being a Volvo does mean that it has, arguably, the mother of all pedigrees when it comes to wagons.

More than 1,800 changes had been made to its predecessor, the 850, to make "the Volvo V70 an even better estate than the 850 -- and the 850 was already one of the best estates on the market," stated the company publicity.

It is always hard not to take such claims with a pinch of salt but we shall just have to see how it performs on this country's less than favorable roads.

The versions that were due to come into Indonesia were the 10- valve, 2.0-liter model and its bigger 2.3-liter, 20-valve sibling that develops 186kW and 350Nm of torque.

But more important is the question of image. No estate is seen regularly on Indonesian roads apart from Mazda's 323-based Vantrend, and I do not yet know anyone who is completely happy with it.

It will be a big challenge for the Swedish carmaker that has had substantial success with its V-line models in practically every other market it has entered.

Mercedes is also looking to launch the estate version of its C230 sometime in the next 12 months, which should help raise the profile of this new market segment.

What is taking off though is the sport-utility sector. It is growing more rapidly than any other and likely to continue doing so for the immediate future.

But Timor is going to have to wait a little longer to be part of it.

Earlier this year, the national car company, PT Timor Putra Nasional, announced it was going to launch its version of the Kia Sportage before the end of 1997, probably in October or November.

But that is now no longer the case. Indeed PT Timor Distributor Nasional (TDN) is being very coy about when it will be launched.

"We are now looking at some time in 1998," was all a spokesperson would say, refusing to even speculate on whether it was more likely to be at the beginning of the year or nearer December.

While PT Timor Putra proudly trumpets the "fact" that it is becoming less dependent on its Korean partner, Kia, day by day, it cannot be coincidence that the Sportage launch is being delayed at a time when Kia is in all sorts of bother.

On Sept. 27, Kia Motors' union decided to strike to pressure the government to step in and rescue the ailing parent Kia Group.

The following day, a Seoul Court froze all the assets and liabilities of Kia Motors and two other of the 13 Kia firms that filed for special court protection the previous week to reschedule debt and retain top managers.

But then on Sept. 29, Kia Group's creditors declared their two month grace period over and gave Kia Motors and the Group's other automaker, Asia Motors, "final notice" to file for court receivership by Tuesday.

The creditors, led by Korea First Bank, rejected Kia's application for court mediation, saying such measures would not help the company return to normal.

Court receivership results in the appointment of new management to administer the company until stability is restored or a third party decides to take over.

TDN president Soemitro Soerachmad said in April the Sportage would be assembled at Timor Putra's plant in Bekasi, West Java with a local content of 40 percent.

But with Kia threatening to jackknife and skid out of control, it is hard to imagine where the other 60 percent will come from.

And with the collapse of the rupiah, Soemitro's promise to sell it for less than Rp 40 million (then US$16,600, now only $12,700) is also hard to believe.

But the exciting thing about the national car program is that one never knows what is going to happen next, so the redoubtable Soemitro might just pull it off.

TDN also said this week it had no immediate plans to launch a version of the Kia Sephia II (the current Timor car is based on the Sephia I), that had its world premier at the Frankfurt Motor Show last month and was still pushing hard to reach its end of year sales target of 40,000 cars.