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Jakarta Post

MTF sets sight on eastern Indonesia

  (The Jakarta Post)
Jakarta
Tue, September 6, 2016

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MTF sets sight on eastern Indonesia The growth of the automotive industry and car ownership in Indonesia (-/-)

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utomotive financing company PT Mandiri Tunas Finance (MTF) plans to tap the growing market for cars in eastern Indonesia by opening new branches in Papua, Maluku and North Maluku to gradually raise its market share in the new car financing sector.

MTF, a subsidiary of state lender Bank Mandiri, disbursed Rp 9.6 trillion (US$729.6 million) of new financing in the first half of this year, a 23.6 percent increase from Rp 7.8 trillion in the same period of 2015.

The first-half figure is already more than half of its total financing target of Rp 18 trillion for this year.

The company’s positive growth, contrary to the automotive industry’s overall sluggish performance in the past couple of years, is being supported by its focus to shift from used cars to new cars, which now accounts for 96 percent of the total financing. The other 4 percent comes from a miscellaneous sector, like financing big motorcycles and heavy equipment.

In the new car segment, 74 percent comes from passenger cars like sedans, sports utility vehicles (SUV) and multi-purpose vehicles (MPV), while the rest comes from commercial vehicles, such as trucks and pick-up cars.

MTF’s financing business is currently centered in Java and Bali, as they make up for 63 percent of its total portfolio. However, the highest growth in the first half actually came from Sulawesi and Kupang, with 30 percent and 20 percent annual growth, respectively.

“Considering the big potential in eastern Indonesia, we want to open more branches there next year, namely in Ternate in North Maluku, Ambon in Maluku, and Jayapura and Sorong in Papua,” MTF president director Ignatius Susatyo Wijoyo said in Jakarta on Monday.

“We aim to capture at least 20 percent of market share in those regions.”

At the same time, MTF also plans to open a new branch in Luwuk, Central Sulawesi, by the end of this year, and in Banyuwangi, East Java, in 2017. Data from the firm show that it had a total of 93 branches and 3,672 employees nationwide as of March and controlled 14 percent market share as of June.

MTF director Harjanto Tjitohardjojo said it hoped to increase the share to 15 percent by the end of this year.

To meet the target, it seeks to leverage the vast network of its parent company and grab Mandiri’s customers by opening satellite offices nearby the lender’s branches. At present, Mandiri has 17 million customers, which is expected to soar to 20 million by the end of this year.

MTF is also planning to penetrate the growing e-commerce market next year by collaborating with major internet company Google Indonesia and launch a mobile application to help customers with several online services, including insurance claims and vehicle ownership document (STNK) renewal.

MTF announced on Monday that it was looking to pocket Rp 3 trillion from continuous bond issuance to finance its operations. The first issuance will take place in October, during which it hopes to raise Rp 500 billion from two series of debt papers.

The A series will mature after three years and offer coupon rates between 7.95 and 8.7 percent, while the B series will be due after five years and offer 8.25 to 9 percent in rates. (vps)

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