The Association of
Indonesian Financing Agencies predicted downturn of business value during
election in 2014 compared to 2009. Financing agencies especially serving
two-wheel or three-wheel automotive were dependent on other industry lines. “In
the election year of 2009 only around 5% to 10%. Meaning downturn by half
although both years were elections years,” Chairman of APPI Suwandi Wiratno
disclosed to Business News [4/4].
Financing agencies service
included credit card, business rentals etc. Financing agency business was
closely related to manufacturing, distribution, single brand holder etc. “as
other industry lines were having downturn.
In Indonesia sales of
2-wheel vehicles was responsive to launching of new brands, which normally
offered new innovative products. Indonesian consumers tend to prefer new
brands. “Probably in 3 to 5 years consumers preferred to buy new products, not
just motorcycles but also motorcars. They would give old vehicles to relatives
and they would buy a new car through financing agencies.”
Although business was down,
the figure was not significant. It could be temporary and APPI remained
optimistic about multi-finance business. Today multi-finance business was also
related to various financial institutions. The relationship strengthened,
especially in the banking sector.
Bank Mandiri resources had
it that multi-finance companies had 78% of fund from banks. Multi finance was
also entwined with insuring of credit guarantee, so insurance companies were
also entwined with multi-finance, while multi-finance had financing resources
from the capital market. Besides, institutions like cooperative societies, life
insurance, pension plan, underwriters, investment managers etc were inter
related in multi-finance business.
“In credit services for
four-wheel vehicles came Hino and Nissan. Financing agencies must be members
first. Toyota had Astra Finance; but not all credit for Toyota products are
financed by Astra Finance. A big company like Toyota has diversed linkages.
Many multi-finance agencies are financing Toyota, it all depended on business
relationship; the agencies were in the respective dealers. BII Finance for
example, was not only serving companies of their own group, it is a form of
Kartel practices. They can be reported to the Commission for Business
Relationship [KPPU].” (SS)
Business New - April 11, 2014
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