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Jakarta Post

The new rich drive up demand for luxury cars

  • Linda Yulisman

    The Jakarta Post

Jakarta   /   Mon, November 18, 2013   /  10:01 am

Indonesian businessman Rudi Gunawan, 44, is a premium carmaker'€™s prime target. Tremendously wealthy and enthusiastic about supercars, he represents a growing market luxury carmakers do not want to miss out on.

'€œI love cars with big cc-engines because they spike my adrenalin,'€ Rudi, a property developer, said in an interview during a Lamborghini customers'€™ gathering in Jakarta. '€œThe supercars I drive symbolize how much I appreciate myself for all the hard work I'€™ve done.'€

Indonesia will join ranks with China and India as a '€œwealth creation giant'€. The amount of high net-worth individuals in the country will more than triple to 104,000 in 2015 from 2010, according to wealth management firm Julius Baer.

Surging riches have driven the appetite for luxury goods, including cars. Italian-based luxury carmaker Lamborghini has doubled its sales within the past two years in Indonesia, now Lamborghini'€™s third-biggest market in Southeast Asia.

Twelve out of 200 units of the Aventador LP720-4 launched to mark its 50th anniversary have been sold here. The hefty price tag of between US$1.250 million and $1.350 million has does little to dampen the interests of
Indonesia'€™s rich.

'€œOur Indonesian clients are not only buying high performance and powerful cars but also the lifestyle. They are very loyal to the brand, not only the product,'€ said Sebastien Hendry, the head of operations for Lamborghini in Southeast Asia and the Pacific.

Not only a reflection of Indonesia'€™s burgeoning affluence, Rudi and others like him represent a new wave of rich consumers, whose emergence has been driven by the mining, plantation and stock market boom in the last decade.

Darwin Maspolim, the chief operating officer of Grandauto Dinamika, the authorized distributor of the British-made Bentley, pointed out changes in its customer profile over the years.

'€œTen or 15 years ago, Bentley buyers were owners of the top-500 companies in Indonesia, the so-called old rich. But now it has changed a lot,'€ said Darwin during the launch of a new version of Flying Spur recently.

'€œMany of them are now successful contractors, lawyers, doctors, plantation owners, etc. They buy it not to show off, but rather to enjoy their lifestyles,'€ he added. And for some, one or two cars is still not enough.

'€œDriving supercars can really up our social status. They boost confidence when meeting up with clients and help expand networks,'€ said Rudi, who also owns two other ultra-premium cars '€” a Ferrari and a Maserati '€” which, along with his Lamborghini, are mostly used on the weekends.

Rudi owns 10 cars '€” Japanese and European brands, including Mercedes, Porsche and Jeep, which he uses daily. While automakers from lower segments continue to strengthen their foothold by expanding plants, luxury carmakers are trying to enhance services, including by upgrading showrooms to appeal to buyers.

Bentley is in the midst of setting up a showroom set for operations in the third quarter of next year. The new showroom, slated to be its biggest in Southeast Asia, highlights the significance of Indonesia for Bentley in the longer term, according to Darwin.

Another ultra-premium carmaker, Rolls-Royce, plans to widen its reach to the country'€™s other big cities to further tempt buyers.

'€œWe'€™re confident in the size and growth of the market here. Indonesia could be our largest market in the future,'€ said Dan Balmer, Rolls-Royce general manager for Asia Pacific.

'€œIn overall potential, we are confident about this market in the longer term. There'€™ll be bumpy roads, but Indonesia'€™s potential will become larger than Singapore,'€ he said.

Indonesia is currently the second top market after Singapore for Rolls-Royce, which recently rolled out its most powerful car '€” the two-door coupe Wraith.

 Vivek Vaidya, Frost&Sullivan deputy president for automotive and transportation practices in the Asia Pacific, said that strong economic performance in Indonesia would continue to boost demand for ultra-premium cars. However, the country did score rather low when it came to infrastructure and general sense of security compared to its regional neighbors, particularly Singapore, which might disrupt its outlook.

'€œThe avenues to drive performance cars in Indonesia are rather low. Law and order in a country instills confidence in buyers in regards to the safety of their cars as well as themselves,'€ Vaidya said.

'€œPoor law and order results in buyers shying away from ultra-premium cars with the fear that their cars may be stolen or they might become a prime target from anti-social elements,'€ he added.

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