Drive for status speeds Indonesia car sales

Sun Jul 1, 2012 11:24pm EDT
 
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By Neil Chatterjee

JAKARTA (Reuters) - Tebet is a modest suburb of the Indonesian capital Jakarta, a district where houses cost around $100,000. On tiny lanes outside many of the red-tiled bungalows sit Mercedes-Benzes, BMWs and Jeeps - imported cars worth as much as the houses themselves.

In the city center and its more exclusive districts, drivers show off sleek Italian hot rods, grand British-made Bentleys, and top of the range people carriers.

The luxury motors are a sign of the growing wealth of Indonesia's middle class, the bulging wallets of its rich after years of a mining and stock market boom, and the desire of both to convert their cash into the most prestigious set of wheels they can afford.

Sabam Rajagukguk, who works for a company running nightclubs and bars, used to drive a Toyota SUV but recently traded up to a $190,000 Land Rover Discovery.

"It makes me feel like the king of the road," he said. "People care how others see them. A Range Rover is the car for the 'haves' now, for a weekday car."

"For a weekend car, the sky is the limit. I see 20-year-olds arriving at clubs in Lamborghinis."

In Jakarta there is a six-month waiting list for Lamborghini sports cars carrying price tags of up to $1.2 million. The marque has long been a status symbol in Indonesia, having been majority-owned by a son of former dictator Suharto in the 1990s until he sold it in the 1998 Asian financial crisis.

Slightly below that echelon of the market, Indonesian sales this year by the world's largest premium carmaker BMW are up 45 percent, faster than its 25 percent growth in 2011.   Continued...

 
Visitors walk past a BMW 328i sports car display at Plaza Indonesia in Jakarta June 25, 2012. Luxury motors are a sign of the growing wealth of Indonesia's middle class, the bulging wallets of its rich after years of a mining and stock market boom, and the desire of both to convert their cash into the most prestigious set of wheels they can afford. Picture taken June 25, 2012. REUTERS/Beawiharta