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Wuling applies cost-efficient measures to compete in RI
Despite the dominance of Japanese brands in the domestic car market, PT SGMW Motor Indonesia is confident it will win over Indonesian customers on the back of its cost-efficient strategy combined with after-sales-services
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D
espite the dominance of Japanese brands in the domestic car market, PT SGMW Motor Indonesia is confident it will win over Indonesian customers on the back of its cost-efficient strategy combined with after-sales-services.
The firm, also known as Wuling Motors, said the application of such a strategy allowed it to produce affordable cars without sacrificing quality and this, it claimed, set it apart from a Chinese car manufacturer
that had previously tried to enter the Indonesian market with a “low-cost strategy,” but to no avail.
“We are not using a low-cost strategy, but instead a cost-efficient strategy. This means that despite being affordable, our products also have complete features,” Wuling Motors president Xu Feiyun told a press conference after launching its new product, a seven-seater multipurpose vehicle (MPV) called the Confero, on Wednesday.
On Wednesday evening, Wuling Motors, a joint venture of China’s SAIC Motor Co. Ltd., Guangxi Automobile Group Co. Ltd. and the United States’ General Motors, officially announced three variants of its MPV model with a 1,500-cc engine, namely the Confero, Confero S-C and Confero S-L, with prices ranging from Rp 128.8 million (US$9,660) to Rp 162.9 million.
The entry of the cars will heighten rivalry in the Indonesian MPV market, currently saturated by Japanese-branded automobiles, such as the Toyota Avanza, Daihatsu Xenia and Honda Mobilio.
The Confero’s low price could at the same time trigger competition in the seven-seater low cost green car (LCGC) market, already occupied by the Toyota Calya and Daihatsu Sigra.
Wuling Motors claimed it could slash its production costs significantly as 56 percent of the components used in its first MPV model came from local suppliers.
The firm has built an integrated supplier center called “Supplier Park” near its car factory in Cikarang, West Java. The park hosts 20 local component suppliers along with another 15 foreign suppliers.
In addition to component supply, Wuling Motors also benefits from car designs already used in China.
Vice president for vehicle, sales, service and marketing, Cindy Cai, said Wuling Motors had prepared 50 dealerships to support its after-sales service.
Its service includes warranty for spare parts, main engine and transmission components, she added.
The company is aiming to sell 8,000 units of the three car variants by the end of this year. As of Wednesday, pre-book orders had reached 800 units, it claimed.
It plans to launch next year two new models, namely a new variant of the Confero with a 1,200-cc engine and another model, which will be more spacious than the Confero.
“With these three models, we expect our [sales] target to reach 40,000 units,” Feiyun said.
The Association of Indonesia Automotive Manufacturers (Gaikindo) forecast car sales, an indicator of national consumer spending, will reach 1.1 million units this year. In the first half of this year the figure hit 534,288 units.
