'You are what you drive' sustains high-end MPV market

'You are what you drive' sustains high-end MPV market

Rudijanto, Contributor/Jakarta

An editorial that appeared in this newspaper some time ago
professed that "You are not what you drive", in reference to
People's Consultative Assembly Speaker Hidayat Nurwahid's refusal
to accept a luxury Volvo as his official car.

For high-end multipurpose vehicle (MPV) distributors, the
reverse is a magic tag line that boosts sales: "You are what you
drive".

Compared to low- and medium-end MPVs, the high-end MPV market
is small but, surprisingly, a stable and promising one. Models
such as the Volkswagen Caravelle, Mercedes Benz Viano 3.0 and
Toyota Alphard are never short of buyers ready to spend Rp 700
million to Rp 1 billion (US$111,000) and beyond to make a
statement of personal style.

A number of prominent figures have been spotted riding premium
MPVs including President Susilo Bambang Yudhoyono, who rode in a
black Toyota Alphard to visit his mother in the small East Java
town of Blitar, while well-known lawyer OC Kaligis once arrived
at the house of former president Soeharto in a VW Caravelle.

Such sightings have raised the image of upmarket MPVs among
affluent Indonesians, lending additional oomph to the "You are
what you drive" campaign.

This is also why the sole distributor of the VW Caravelle,
Garuda Mataram Motor, has forecast a sales growth of over 100
percent for this year.

"This upper market segment is very promising. Our data shows
that sales growth has been quite satisfactory, since we have sold
between 100 units and 150 units of the VW Caravelle annually,"
said Wanny Bhakti, head of public relations at Garuda Mataram
Motor.

With an on-the-road price tag ranging from Rp 850 million to
Rp 1.25 billion, the new VW Caravelle is certainly beyond the
reach of most Indonesian families. However, heightened demand
since the September launch of the new Caravelle has made Wanny
confident in setting a year-end sales target of 30 units.

"We imported 10 units for the Jakarta Motor Show II in
September, 2004 and they sold out during the event. Some buyers
had to register as indent buyers, and will receive the car at the
end of the year," he said.

Many have also fallen in love with the Toyota Alphard 3.0 and
2.4, with their large yet elegant design -- never mind the Rp 500
million-to-Rp 700 million price tag.

Unlike the Caravelle, which is imported by a single
distributor, general importers have brought in a variety of
Toyota Alphard 3.0 and 2.4 models.

The lack of strong after-sales services from an authorized
distributor has not diminished customer demand for luxury MPVs,
and in the third quarter alone, the former Ministry of Trade and
Industry received a request from several firms to import a total
of 600 Alphard units from showrooms across the world, including
those in Singapore and Australia.

Another important player in this segment is Mercedes Benz,
which markets its MB Viano 3.0 (Ambiente). Sold for Rp 9.46
million off the road, the Viano 3.0 attracts buyers not only
because of its well-established brand name, but also for the
comfort the Viano offers with its roomy cabin.

Measuring about 5m long and 2m tall, the eight-seater Viano
looks like the grand and expensive MPV it is, compared to the low
and medium MPVs that dominate the market, such as the Toyota
Innova, Honda Stream, Hyundai Trajet and Suzuki Aerio.

Upmarket buyers have responded positively not only to high-end
MPVs, but also to sports utility vehicles (SUVs), another non-
sedan vehicle.

One particular high-end SUV model that has an established
market in the country is BMW's X3 series, particularly its X3 30i
and X3 2.5i.

At Rp 849 million and Rp 749 million respectively, BMW has
already sold 42 X3 units as of September. The two BMW X3 models
were launched in July, targeting high-end buyers who love SUVs.

As with its older brother, the BMW X5, the new BMW X3 features
xDrive technology, which enhances road grip, agility and safety,
and BMW's Hill Descent Control (HDC), which assists drivers when
driving down hills -- even on loose ground or slippery surfaces.

"BMW does not have an MPV model in its worldwide product
portfolio. In keeping with our tag line 'Sheer driving pleasure',
BMW focuses on the development of sporty, dynamic and high-
performance cars that will offer enjoyment for those driving and
riding the car," said Feldani Effendy, PT BMW Indonesia's media
relations officer.

The MPV/SUV premium vehicle market in Indonesia is relatively
small compared to its low- and medium-vehicle markets.

DaimlerChrysler's Deputy Director for Marketing Planning and
Communication Yuniadi Hartono said the high-end MPV market was
very limited, particularly for exclusive European MPVs such as
the Mercedes Viano and VW Caravelle.

"Last year, Mercedes Benz and VW together sold approximately
100 units. This year might end with similar sales figures," said
Yuniadi.

The domestic SUV market has always been hot, particularly with
the influx of low and medium SUVs such as the Toyota Avanza,
Daihatsu Xenia, Kijang Innova and Suzuki APV. Priced between Rp
70 million and over Rp 200 million, the newly launched SUV models
have already attracted thousands of willing indent buyers.

As of September, the affordable Toyota Avanza recorded sales
of 32,203 units, while Toyota Kijang Innova drew 33,000 indent
buyers just a month after its launch. Although not as impressive,
the Suzuki APV still recorded 4,000 indent buyers as of mid-
September.

Following the successful presidential election and smooth
transition of power in the country that boosted consumer
confidence, the Association of Indonesian Automotive
Manufacturers (Gaikindo) raised its domestic sales target to
between 400,000 and 420,000 units, from its earlier target of
385,000 units.

The country's total car sales reached a total of 348,736 units
during the first nine months of this year, or an increase of
nearly 30 percent as compared to 268,531 units in the same period
of last year.

Gaikindo chairman Bambang Trisulo predicted that next year's
market would be more promising, with sales reaching 480,000 to
500,000 units, and sales of cars in the Rp 100 million to Rp 150
million price range is also expected to boost the domestic
automobile market.

Of course, such an optimistic forecast depends on the
country's political and economic conditions. However, it seems
that no matter what may come to pass, sole distributors of high-
end MPVs and SUVs will continue to survive and grow as long as
they chant the magic words "You are what you drive".