Volvo's Indomobil and PT Timor delay new cars
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.