'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".