Business Development Asia LLC
South East Asian Automotive News
Issue 3, October 1997
INDONESIA
Car sales in Indonesia
Aug 97 Jan-Aug 97 Jan-Aug YoY (%) Units sold 43,234 287,653 +37.6
August's sales were up 61% on last year's figure. A price adjustment announced in mid-August caused consumers to rush to purchase cars before the rise. Demand is expected to weaken in September due to increased prices exacerbated by currency devaluation and higher interest rates. Auto sales for FY97 are estimated to total 370,000 units and industry sources predict 15% growth for 1998. 13,799 units of the Timor were sold in the first eight months, substantially below its target of 46,700. (August 31st 1997)
Astra, Indonesia's largest vehicle manufacturer with a 50% market share (mainly won through its link with Toyota), has progressed its development project to develop a new passenger car of its own. The company hopes to launch the car by 2001 and will unveil a prototype next year. (September 19th 1997)
Horie Metal, a Japanese Toyota-related auto parts maker, is to enter into a JV with an Indonesian company this year to manufacture zinc plated components. There are few quality plating factories in Indonesia and the company will supply the auto, motorcycle and household products sectors. (August 22nd 1997)
The Salim Group plans to merge its auto operations into a new company which will be named Indomobil Sukses Internasional. Indonulti Inti Industri will merge with Indomobil Investment Corporation and will divest all its non-auto related businesses. Indomobil Investment Corporation currently manufactures and assembles Suzuki, Hino, Nissan, Mazda, VW and Audi vehicles. Net earnings in 1996 were US$40.8m. (September 16th 1997)
Sumi Rubber Industries (SRI) has been exporting 300,000 tires per month since opening in April 1997. SRI is a joint venture between Sumitomo Rubber Industries of Japan and Indomobil, the Salim Group's automotive division. SRI's Cikampek factory has a production capacity of 1.5 million tires per year. The majority of the tires will be exported using Sumitomo's global distribution network. (September 5th 1997)
Timor Putra Nasional, Indonesia's national car project, has finally secured a US$690m loan from a 16-bank consortium to build an assembly plant near Jakarta. The consortium of 4 state-owned and 12 private banks will spread the loan over ten years, supervised by a special Government committee. Economist Faisal Basri of the University of Indonesia doubts Timor's capacity to repay the debts. Mr. Hutomo Mandala Putra, son of President Suharto and founder of the company, has said that there is a strong possibility that Timor will go public next year to generate fresh funds to strengthen its capital base. (August 13th 1997)
Recent News: Malaysia, Thailand, Philippines, Singapore, Regional Focus: The impact of South East Asia's financial turmoil on the auto industry
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