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Friday, May 14, 2010

Indian auto cos set their sights on Indonesia

Riding on the recent Indo-ASEAN free-trade agreement (FTA) on goods, the Indian automotive sector is keen on establishing a presence in Indonesia.

According to the recent agreement, the import duty on Indian automobiles will progressively come down to five per cent.

Maruti exports

According to the Indian Ambassador in Indonesia, Mr Biren Nanda, Maruti Suzuki India has already started exporting the Estillo in small numbers to the world's fourth most populous country (after China, India and the US).

“In fact, when the FTA was signed, one of the first communications I received was from Maruti Suzuki,” he said.

“Tata Motors is in the process of appointing a dealership in Indonesia,” he said, adding that the company had earlier showcased an SUV, a pick-up vehicle and a sedan at the ‘Made-in India' exhibition in Jakarta in 2009.

The Indian envoy is currently in communication with the Federation of Indian Chambers of Commerce of India (FICCI) to persuade Tata Motors to showcase the Nano in the next ‘Made-in India' exhibition scheduled in 2011. Comments were not available from Tata Motors in this regard.

Expanding reach

Meanwhile, Indian companies, namely Bajaj Auto and TVS Motors, are reportedly expanding their reach in the two-wheeler market in the country.

While Bajaj Auto has a long-standing presence in Indonesia through its three-wheelers, the company is now targeting the value market in the two-wheeler segment. On the other hand, TVS Motors, which is a new entrant, is targeting the volume market.

“The Indonesian automotive market is traditionally dominated by the Japanese companies and is extremely mature. To this effect, Indian companies are methodical in establishing the necessary service infrastructure across the country before pushing up sales,” he said.

In the automotive ancillary sector, Minda and Precol have already set up facilities in Indonesia. The export of auto ancillaries from India is also on the rise.

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