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Astra says Geely's price offer may not float
Astra International, the country's largest automotive distributor, said it doubted Chinese carmaker Geely Automotive Holding's claims that it would sell the world's second cheapest vehicle in Indonesia for Rp 13 million (US$1,456) per unit
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stra International, the country's largest automotive distributor, said it doubted Chinese carmaker Geely Automotive Holding's claims that it would sell the world's second cheapest vehicle in Indonesia for Rp 13 million (US$1,456) per unit.
Company officials said that Indonesia's infrastructure costs are more difficult and therefore operating costs were relatively higher. "It will be difficult for them to sell cars at such low prices given the high operational costs here," said Toto Suryana, operations chief for Daihatsu, one of Astra's brands.
Reports previously said Chinese carmaker Geely's would sell low-priced vehicles at 1,000 yuan (about Rp 13 million) per unit. Gelly will start producing the vehicles, which is named the Intelligent Geely (IG), in 2012 and start sales in 2013, according to reports. The cheapest vehicle in the world is India's Tata Nano, which is currently sold for as low as $2,500 per unit.
The IG may be offered for Rp 25 million per unit in Indonesia, after calculating local import duties. said Geely Mobil Indonesia president director A. Budi Pramono. Units of the vehicle were displayed at Beijing Auto Show 2010 from April-May.
The IG is four-seat car with gull wing doors that has limited space but can accommodate four adults. It is powered by a 988cc gasoline engine and reach a top speed of 150 kilometers per hour. Astra officials said that they doubted that Geely could set such a low price if it wanted to sell the vehicles in Indonesia, adding that high production costs continue to hamper local carmakers efforts to sell low-cost vehicles.
"The infrastructure to build showrooms is difficult in Indonesia. Car distributors will need roughly Rp 30 billion to build a single showroom," he said. "It will be difficult for the Chinese to expand," said Jodjana Jodi, operations chief for Astra's Auto 2000.
The cheapest Chinese-made vehicle now available in Indonesia is the Chery QQ with a 1,100cc gasoline engine and a cost of around Rp 90 million.
Astra sold 208,000 vehicles in the first half of 2010, while nationwide vehicle sales were at 370,000 units. Astra is optimistic that national vehicle sales could reach a record-high 700,000 units by year-end. (est)
