BMW Fully Assembles 7 Series in Indonesia to Tap Long Term Luxury Car Market
Jakarta. German car maker BMW has sent an important message to competitors with the launch of its 7 series sedans to be assembled in Indonesia, as part of an effort to tap the long-term prospects for luxury vehicles in Southeast Asia's largest economy.
Teaming up with manufacturer Gaya Motor, a unit of Indonesia's biggest automotive company Astra International, BMW could produce up to six units of the 7 Series a day with standardized supervision from German engineers. This is the first time BMW has a fully locally assembled car since launching in Indonesia 15 years ago.
The German car-maker has sunk more than Rp 210 billion ($15.5 million) over the last five years in the country to assemble more car models in Indonesia and the 7 series, which was introduced earlier this year, is the latest addition to its local line-up.
The German company's local arm BMW Indonesia introduced the 7 Series earlier this year, and with local assembly, the company expects to generate a significant increase in revenue from the high-end cars segment, its top executive Karen Lim revealed.
"Local mechanics have been trained by German engineers for a year to do the assembly operations and quality assurance. I personally appreciate Gaya Motor's staff who are very capable of setting a high standard of production," BMW Indonesia management production partner Albert Reichl said.
Among the advanced features on board for the 7 series is the Touch Command. Using a seven inch tablet provided in the rear-seat, Touch Command allows passenger to set seating positions, interior lighting, air conditioner, radio, navigation and communications wirelessly.
Another sophisticated feature is the Dynamic Damper Control, or an automatic suspension control which set the gap between the car's chassis with the ground, and is operated based on various modes.
For instance, if driving on stoned roads, the Dynamic Damper Control will set the chassis higher to avoid contact with the surfacce, while if the car goes with high speed, the chassis will automatically move closer to ground as to create firm stability.
"We set a high standard for the process, quality control and workers' safety," BMW Indonesia president director Karen Lim said.
The new strategy is believed to be effective as Jakarta hosts a variety of leading car brands, mostly dominated by Japanese cars but with some European and US firms, many of which began local assembly since many years ago.
"To meet the customer needs is the key reason why we started assembling cars internationally," BMW Asia managing director Axel Pannes said at Gaya Motor factory site, in North Jakarta, on Wednesday (30/11).
BMW's closest rivals, such as Daimler's Mercedes-Benz, have also began shifting part of production to Indonesia to reduce costs and improve turnaround times, but it hasn't had a fully locally assembled car on offer to the market.
Having a local assembly plant could benefit global car makers for lower import tariffs for certain components.
BMW sold a total of 3,638 cars in Indonesia last year, representing a 5.7 percent increase from a year earlier.
New parts distribution center
In addition to launching its first ever Indonesia-assembled 7 Series, BMW has also established a 4,000 square meter Parts Distribution Center in North Jakarta, demonstrating the German car maker's ability to penetrate more of the country.
With the new center, BMW will provide the car parts just in time.
"Apart from service excellence, the new Parts Distribution Center assures the availability of parts, most importantly the slow-moving parts, as we always try to meet or even exceed customers' expectation," BMW Indonesia president director Karen Lim said.
BMW has teamed up with Astra International sub business unit Tjahja Sakti Motor to deal with this new development.
Good for the economy
While assembling cars locally could cut down distribution costs, BMW also offers a benefit to Indonesia with the new strategy will positively multiply the economy, such as boosting new job opportunity.
"We are happy with the new investment made by BMW in Indonesia as it has invested more than $200 million, which is also creating new jobs," I Gusti Putu Suryawirawan, Indonesia's Director General of Machinery and Transportation Industries, said at the same event.
BMW's assembling plant is expected to help spur domestic economy, Suryawirawan added.
"Automotive is one of salient industries that significantly contribute to our GDP," he said.
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