I just wondering why on earth the government accepts the offer of big players to sell their LCGC to Indonesia… yes it is true that almost 84% of the components are manufactured in Indonesia, hence the car designers also from Indonesia. Even Esemka can only use 60% of local components with double the price of LCGC, but why the controversy arises?
Let me break it down to you based on my understanding
The term low cost is equal to cheap car, but does it really that cheap? Averagely, LCGC price is ranged between IDR 70-120 mil, the price range is equal to several famous used Mid-End brands such as Avanza, Xenia, Baleno, Vios, Jazz, Yaris, Swift, etc. Again, does it sound cheap if the purpose of the LGCG is for mid-low income of society?
Let’s assume that most people who want to buy the car are using bank loans as the media. Bank surely wants at least 30% as the down payment. Assuming the price tag is IDR 100 mil, so the customer must provide IDR 30 Millions as the down payment. With the average pace for loan period is 3 years, so IDR 70 mil divided by 35 (months), plus some average interest rate of 5 % p.a (IDR 300,000 per month), so in short the customer will pay the installment by IDR 2.3 mil per month.
Bank will only grant the loan for customer if the total installment per month is averagely 1/3 of his/her monthly salary, so to get IDR 100 mil LCGC customer must have IDR 7 mil salary. Now how on earth you can categorize IDR 7 mil-rated customer as mid-low income!
When I first heard about LCGC, I imagine of hi-tech car with non-fuel consumption, electrical car maybe, or a hybrid. But soon it disappoints me as the manufacturers introduce a car labeled green, geared with low fuel consumption. LCGC still targeting fuel called “premium” as their daily needs. So as per government policy of limiting the consumption of “premium” fuel for general consumption due to the increase of world’ oil price, they double-crossed their own policy by implementing car with no sense of green. Hence, the government also did not pay more attention to the development of infrastructure of roads and public transportation. Again they’re committing policy-suicide by introducing LCGC faster than granting budget allocation for MRT or any other mass transportation or i can say faster than the speeding bullets? hmmm…
So what is behind the policy? Many people think that it’s more political decision rather than common-sense decision. Some stakeholder needs to raise some funds for general election next year, so its sounds like there is something behind the decision.
All and all, despite the “gawky policy”, I do feel happy that the access for relatively cheap car can be accessed by more people, look at the bright side; the accident rate of using motorbike soon to be decreased, more people are comforts traveling and theoretically as the automotive industry doing good, it’ll absorbs more workforce.