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Indonesia to become GM China?s automotive base

16 December 2011

Indonesia to become GM China’s automotive base


LIUZHOU, China: SAIC GM Wuling Automobile Co Ltd, a joint venture between SAIC Motor Co Ltd and General Motors China, will make Indonesia as production and export base of passenger car in 2014.
The company’s shareholders have approved such plan and will coordinate intensively with PT General Motors Indonesia (GMI) as well as lobbying the government, SGMW Marketing & New Business Section Overseas Business Department Jiaxian Ding said.
“Indonesia will become the second production base and export in Asia, behind India. We will focus on developing the market of multipurpose vehicle [MPV] in the country. It can’t be delayed anymore,” he told Bisnis during visit to SGMW Megafactory in Liuzhou GuangXi China last Saturday.
The investment feasibility study will complete next year. In 2013, SGMW will conduct localization process through the establishment of supporting infrastructure and development of component industry as well as marketing test. “We will kick off the establishment of assembling factory in 2014.”
GMI and SGMW will work together to develop Indonesia market and export, while the supply of completely knocked-down car will be from the Liuzhou factory. The share composition in the cooperation is planned around 50:50.
However, he could not mention whether they will use Wuling or GM brand for the vehicle in Indonesia. In China, SGMW markets most of its products under Wuling brand.
The company has strong domestic market share in China for small vehicle segment, by around 40% in 5 years consecutively. It targets 1.35 million units in sales with market share of 46% this year.
SGMW launched Wuling Hongguang for commercial compact vehicle class in September 2010, and sold more than 150,000 units in a year. In medium sedan segment, Baojun 630 launched in August 2011 with car order exceeded 10,000 unit as of October.
The company owned several well-known brands for passenger car in China like Wuling Hongguang, Wuling Rongguang, Wuling Sunshine, and Wuling Hongfu as well as commercial car such as Wuling Single-cab D 150, Double-Cab D 150, and PN pickup.
Most prospective
According to Jixian Ding, Indonesia is the most prospective country among other ASEAN members for long-term investment, since it has large market.
“We are not interested to Malaysia or Vietnam as well as Thailand, although the automotive industry in Thailand is well-developed. For us, Indonesia is the best option since it still has a large market.”
The company will boost MPV sales up to 40,000 units per annum if the factory in Indonesia has fully operated or equivalent to 16.67% from the total MPV shares in Indonesia of around 240,000 units currently.
SGMW prepares low MPV CN 100 for Indonesian market. Such vehicle is equipped with engine above 1,000 cc and sold at price of US$7,000 for export market. “Currently, we have been exporting CN 100 to Middle East with export price around US$5,000-US$6,000 per unit.”

At the same occasion, Secretariat of Directorate General Of High Technology-Based Superior Industry Syarif Hidayat said the government is poised to facilitate every investment since it will provide value-added, taxes, and jobs opportunities.

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