Chrysler Unveils $100m Indonesia Plan

Jakarta Globe, Faisal Maliki Baskoro, July 22, 2011

Related articles

• Indonesia Set to Be Region’s Car King
• World’s Cheapest Car to Be Made in Indonesia: Report
• Car Sales Rise 12% Despite Japan Blip, Gaikindo Says
• Chinese Carmaker BYD Makes Top-Gear Debut in Shenzhen
• Indonesia’s Growth Potential Putting Automakers in Gear

US automotive giant Chrysler is planning to spend $100 million in the next three years to expand its business in Indonesia, capitalizing on the fast-growing demand for premium cars, a company executive said on Friday.

The Detroit-based Chrysler will use the funds to open 18 dealerships across the country, said Ferial Fahmi, president director of Garansindo Inter Global, the sole licensed distributor of Chrysler cars in Indonesia.

“Since 2009, we have spent $10 million to open five dealerships across Jakarta, Surabaya, and Bali. We want to have 23 dealerships across Indonesia in the next three years,” he said .

Chrysler may also be looking to open a factory in Indonesia, he said, but did not elaborate.

Speaking on the sideline of the 19th Indonesian International Motor Show, Ferial said the expansion was aimed at boosting Chrysler’s market share in the premium segment in Indonesia. “We’re hoping we can become one of the top two brands in the premium segment,” he said.

In Indonesia, Chrysler plans to sell brands including the Chrysler 300C, Cabriolet Sebring, the Dodge Journey and Jeep models Wrangler Sahara, Wrangler Rubicon and Patriot. The brands are all completely built-up units.

According to the Indonesia Car Industry Association (Gaikindo), an estimated 5,000 premium cars were sold last year. The segment is currently dominated by European car makers, including BMW and Mercedes Benz.

Ferial said that Garansindo Inter Global was on track to reach its sales target of 700 units this year.

Meanwhile, Panggah Susanto, director general for manufacturing industry at the Industry Ministry, said Chrysler was considering opening a factory in Southeast Asia.

“Meeting with Peter MacKenzie [Chrysler’s Southeast Asia regional manager] on Thursday, he said the company was looking to build a manufacturing base in Southeast Asia,” Panggah said. “Indonesia is one of the countries they are eyeing.” No further details were provided on the development of a manufacturing plant.

Industry analysts welcomed plans by Chrysler and other global automotive producers to consider setting up manufacturing plants in Indonesia as a show of confidence in the automotive industry in the country. Car makers ranging from Indian low-cost manufacturer Tata Motors to premium brand BMW have stated an interest in expanding their business here.

It was revealed on Thursday that Tata had launched a feasibility study into the notion of opening a factory to produce its Nano model in Indonesia.

Astra Daihatsu Motor, the sole distributor of products from Japanese firm Daihatsu, has announced a Rp 2.1 trillion ($246 million) investment plan to build an 80-hectare factory in Karawang, West Java, to raise annual output to 430,000 units.

The BMW group has announced it would be spending Rp 100 billion to double its capacity, while Suzuki has announced an $800 million expansion over the next two years.

As many as 32 authorized sole license holders and 227 automotive-related industries are participating in the motor show at Jakarta International Expo in Kemayoran.