Indonesian car producer PT Astra International is in talks with its French principal partner PSA Peugeot Citro*n to determine the possibility of reviving an assembly line for Peugeot cars here amid an expected automotive boom.
"Peugeot has given a positive signal that we can assemble its cars in our Gaya Motor plant in Jakarta in 2012," said Constantinus Herlijoso at the launch of the European crossover, Peugot 3008, on Friday.
Herlijoso said domesticating the assembly line would provide a significant boost to the sales of Peugeot cars in Indonesia as production costs would be more competitive with lower taxation, as well as the utilization of local laborers and content, expected to reach 40 percent for each unit.
"We are now discussing which model to assemble in the country," Herlijoso said.
In 2003, Peugeot began assembling cars in Indonesia with the 206 model, but halted its output just two years later due to the skyrocketing value of the euro, which hiked prices and plunged overall sales from 2,000 units in one year, to just 85 last year.
Astra currently imports all Peugeot cars in the form of the CBU.
"This condition means Peugeots are sold here at a relatively high price due to high tax for imported CBU cars," Constantinus added.
The import duty for cars imported in the form of the CBU is currently 40 percent, while cars imported in the form of a complete knock down (CKD) is 15 percent.
Astra currently targets to triple the sales of Peugeot cars to 120 units this year with the launch of the 3008 model. Herlijoso said the company expected to sell about 60 units of the 3008 model, which are priced at about Rp 430 million (US$47,300), by the end of this year.
Global sales for the 3008 model were at 50,000 units last year.
"To attract customers, the price for the 3008 model will also include five years of free maintenance service and two years of warranty," Herlijoso said
In the first six months, Astra sold 30 units of the hatchback Peugeot 207 and 15 units of the hatchback Peugeot 308.
The company mentioned it planned to launch the Peugeot 5008 "multi-purpose" vehicle in the fourth quarter of this year.
Also present at the launch was Indonesian Automotive Industry Association (Gaikindo) chairman Sudirman Maman Rusdi, also vice chairman of PT Astra Daihatsu Motor. "We predict that the country's total car sales will grow by 6 percent next year," he said.
This year, Gaikindo expects the country's total car sales to reach 680,000 units.
As of last month, car sales reached 367.832 units.
Astra fell the most in nearly four weeks in Jakarta trading on Friday after the June inflation accelerated more than expected, reducing the outlook for the Indonesian company's automotive sales, Bloomberg reported.
Astra declined 2.4 percent to 46,400 rupiah as of 3:01 p.m. local time, set for its biggest drop since June 7.
The stocks fell as Bank Indonesia may raise its benchmark interest rate earlier than expected because of faster inflation, said Muhamad Sugiarto, an analyst at PT Lautandhana Securindo in Jakarta. (rch)
