Indomobil raises sales target on strong demand for hatchbacks

The Jakarta Post ,  Jakarta   |  Sat, 06/21/2008 12:22 PM  |  Business

The country's second-largest automotive dealer PT Indomobil Sukses International Tbk raised its sales target 20 percent this year due to significant market growth for hatchbacks and trucks.

President director Gunadhi Sindhuwinata said Friday that in the first five months of the year the demand for hatchback cars for personal use remained strong, while the demand for trucks was driven by high growth in the plantation and mining industries.

"The waiting list for the Nissan Grand Livina, a hatchback, is three months, while the waiting list for Hino trucks is one year. Thus it's not impossible for our sales to go higher than our earlier target of 100,000 units," Gunadhi said during a public expose on the company's performance in Jakarta.

This year, the company aims to sell 120,000 vehicles, including 40,000 Nissan hatchbacks and 12,000 Hino trucks, or twice the numbers sold last year, while sales of sedans and motorbikes will continue to grow at 30 percent.

Indomobil holds licenses to sell numerous car brands including Suzuki, Nissan, Hino, Volvo and Audi. Between January and May, the company has sold 50,356 cars with a total sales value of Rp 2.5 trillion (US$270 million).

"In the first five months, we've sold more than 50,000 units. That's 10,000 units each month. If we maintain that figure for the next seven months, that's a total sales of 120,000 units," Gunadhi said.

Gunadhi said the company would double its workers' overtime shifts to keep in control of supply.

"The increase in overtime shifts is part of this year's capital expenditure of Rp 120 billion. We also plan to add more showrooms and buy more spare parts for our auto shops," Gunadhi said, adding that the company has no acquisition plans and would continue to concentrate on keeping up with demand.

Indomobil aims to gain Rp 9 trillion in revenue this year, a 77 percent increase from Rp 5.1 trillion last year.

The company will also unveil a new model at the Indonesian Car Show Exhibition next month.

Indomobil has controlled more than 20 percent of the country's market share for the past four years.

When asked how the company would respond to the recent fuel increase, Gunadhi said it was unaffected.

"Outside of Java, the recent fuel prices increase happened along with the rising prices of commodity. Thus we're still optimistic that people outside Java will be able to buy vehicles. Besides, cars and motorbikes sales remain strong even after the fuel prices increase; that shows that the automotive industry is not really affected," he said.

Soebronto Laras, Indomobil's president commissioner, said the company remained cautious regarding the increase in fuel prices, but added that he was more worried about another interest rate increase from Bank Indonesia, the country's central's bank.

"The last time Bank Indonesia raised interest rates in 2005, most of our customers could not pay the high interest for the financing. If the bank can maintain the rate at the current 8.5 percent, our projection should be on target," he said.

In May, Bank Indonesia raised its interest rate by 25 basis points to 8.5 percent to control inflation from skyrocketing crude oil prices. (anw)

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