BMW Group To Establish Subsidiary in Indonesia

BMW AG will set up a wholesale company, PT BMW Indonesia, which will
start operating from 1 April, 2001. This was announced by Mr Lueder
Paysen (Senior Vice President, BMW Group Sales Division) at a media
conference in Jakarta today. 'This new subsidiary is a clear sign of
the confidence that BMW has in the long-term future of Indonesia and
our commitment to maintain and extend the leading position that BMW
already has in Indonesia', Mr Paysen said. BMW Indonesia is responsible
for a market where approximately 2,500 BMW cars were sold in 2000
through 21 sales outlets and more than 28,000 BMW vehicles are in use.
Mr Paysen noted that with the positive development of the Indonesian car
market since the economic crisis, the time is now right to extend BMW?s
involvement to a new level. 'Indeed, this latest development by BMW
further strengthens the long-standing and warm relationship between BMW
and Astra International (parent company of PT Tjahja Sakti Motor Corp).
Our new arrangement brings together the special expertise from both
parties', he added. The activities of BMW Indonesia will include the
wholesale of BMW cars, motorcycles, spare parts and accessories, as
well as the overall planning of sales, marketing, after-sales and
related activities in Indonesia. PT Astra International will continue
to import BMW products, both built-up and in completely-knocked down
(CKD) kits, through its wholly-owned subsidiary Tjahja Sakti Motor
Corp. Astra will also assemble BMW cars for the local market, as it has
been doing so since 1976. And finally, BMW cars and motorcycles will
continue to be sold through the network of BMW dealers, about half of
which are owned by Astra. On the decision of BMW to invest directly in
Indonesia now, Mr Paysen said: 'For BMW, the decision to form a
wholesale company is part of a long-term strategy and should not be
based on the current economic climate, especially when looking at a
developing market which has great potential in the future. In addition,
to tap into this potential, one has to make investments and commitments
now to prepare the ground for when the market expands.' Working
consistently through its own sales subsidiaries established initially
in the world's largest markets, BMW has been pursuing a global strategy
ever since the '80s. The list of markets handled directly by the BMW
Group ranges from the largest single markets in Europe all the way to
Australia, South Africa, South Korea, and Thailand. In 1981, BMW
became the first European car maker to establish its own subsidiary in
Japan, which was generally considered a closed market. Last year, more
than 36,000 BMW cars were delivered to Japanese customers. In 1994, BMW
Korea was set up, the first foreign car maker to form a subsidiary
there, pushing sales up from about 200 units a year to over 1000 units
in two years. In 1997, BMW Thailand started operating, the first Thai
subsidiary of a European car company. And in the following year, in the
middle of the Asian crisis, BMW AG announced that it will build its
first wholly-owned plant in Asia to be located in Thailand. Since then,
BMW clinched the top position among luxury cars in Thailand in 1999 and
2000 as well. The first cars from BMW Thailand Manufacturing also
started rolling out last year. The objective in the current phase is to
efficiently develop additional markets with a growth potential, for
example in Indonesia. A second aspect of this sales strategy is to
follow the development of markets through direct, local production
activities: The most recent example in this context is the BMW plant in
Thailand, which started operations last year. On a worldwide basis,
the BMW Group ended the year 2000 with a new sales record for BMW cars.
Altogether, more than 822,000 vehicles were supplied to customers
worldwide, which represents an increase of 9.4 percent over the previous
year (751,272). Deliveries of BMW motorcycles also set new records.
Altogether, around 74,500 BMW motorcycles were sold in the year 2000,
representing an increase of over 14 percent over the previous year
(65,168 units). * The full speech of Mr Lueder Paysen can be downloaded
by clicking on the attached document.