Thomas Tan is CFO and member of PT Tunas Ridean Tbk council, the largest group of independent car dealers in Indonesia, and part of the Jardine Matheson group, a diversified conglomerate in Hong Kong whose headquarters. Thomas takes the time to talk about his role and his time in Indonesia.
Thomas, thank you for your time. Let us start with your background and experience to date?
My family is Taiwanese side of my mother, and Malaysia on my dad. I was born in Malaysia, but my family moved to Australia when I was six. I did a Bachelor of Commerce and Law in Sydney, and my MBA at INSEAD. I am a CPA Australia, and prior to joining Jardines I spent ten years with ANZ Bank and Barclays Capital in Melbourne, London and New York. I joined Jardine Matheson in 2009 to pursue a career in the industry back in the Asia-Pacific region.
How did you get to be in Indonesia - what attracted you, and you kept here for?
I worked in Jardine Aviation Services in Hong Kong when asked to consider an allocation to Tunas in mid-2011. I met the founding family and was attracted by the dynamism of the company and Indonesia. At the time, people warned me to lower my expectations about everything here. My experience of living and working in Indonesia has exceeded this bar, and I discovered that I really enjoyed the adventure and surprises it brings.
What do the Tunas Group in a few words?
Tunas comprises three main business companies: sales to automotive retail and after-sales for Toyota, Daihatsu, BMW, Mercedes-Benz and Peugeot cars, as well as Honda motorcycles; rental cars, for corporate clients; and the MTF of auto finance business, which Tunas sold 51% of Bank Mandiri in 2009, but is still important auto loan provider and close partner for us.
You are in the automotive industry. What is your view on the recent developments regarding fuel prices in Indonesia (and the price of oil in the world)? How Tunas expect this to impact the business?
It is fortuitous that oil prices have fallen to date for fuel subsidies to cut without hurting consumers. Speaking in the interest of Indonesia, I think Jokowi should actually go further maintain the highest gasoline prices and abolish the diesel subsidy completely. A tax on gasoline should be the ultimate objective, which could be adjusted downward if necessary as a cushion for future increases in the price of oil on the market. As for auto dealers as Tunas, I do not think that moderate increases in fuel prices will have an impact on aggregate demand, as long as public transport remains poor or no alternative. Cars are also an ambitious goal for most Indonesian families. People will still buy despite the rising cost of the property, although high fuel prices are changing consumer preferences toward more economical cars.
What do you want, the main challenges of the automotive industry in Indonesia today?
short term, overcapacity in car production in Indonesia and increased supply side to the static demand hurt margins for car dealers. In the longer term, more infrastructure to accommodate the growing population of the automobile will be key to sustained growth. Increasing the productivity faster than the cost is also a challenge for maintaining profitability.
What growth plans have Tunas Group for Indonesia?
We see good growth opportunities for cars in new suburbs of Greater Jakarta, outside Java for motorcycles, and in the second-tier cities for rental of business. We will continue to add new branches where the investment case is good, what is now difficult to see in Jakarta because of high costs.
There is strong growth fundamentals. As prosperous Indonesia, penetration of the car will continue to increase. More sales will come from outside Jakarta, now acccounts still nearly 40% of sales of national cars. I think Japanese brands continue to dominate the market for both cars and motorcycles. Local production will increase, and should be competitive in the export market and the future of the ACS.
The Tunas Group is an Indonesian company with close ties with Hong Kong via Jardine Matheson. What is it like working with the two cultures?
Jardines provide strategic oversight and guidance on good practice and governance, but otherwise Tunas operates autonomously. Day to day, I am part of the fabric Tunas and I adapt to the culture and environment in order to be effective. Tunas has a good relationship with the Jardine group, which helps me ensure that differences of view are quickly understood and reconciled.
What were your initial perceptions of the main differences between working here and work in a highly developed Asian countries like Hong Kong, and those have changed for you over time?
I find that the people of Hong Kong were more effective and less necessary monitoring and training in Indonesia. This has generally remained loyal, and I adapt accordingly. On the positive side, I find enjoyable to work with Indonesians, respectful and positive course. In Hong Kong, people seemed upset because they do not possess. In Indonesia, people are happy with the things they have.
"The Indonesians are people first. Smile and enjoy their warm company. Do not impose your ideas of quality and performance. Whatever the problem, it can be worked amicably. "
What were the main challenges of living and working in Indonesia as an expatriate for you?
once I overcame the language barrier, the major challenge has become to constantly check my expectations and be quiet and respectful, no matter the circumstance.
what your advice for expatriates who come to work here other Asian countries?
Indonesians are people first. Smile and enjoy their warm company. Do not impose your ideas quality and performance. Whatever the problem, it can be worked amicably. Read Indonesia Etc. by Elizabeth Pisani -. a great book that encapsulates the trials, but also the charms of Indonesia
?What is the best part of your day at work
When I first arrived in the office, we greet our salvation society: Salam I worry. It is a bit cheesy for expatriates, but I like the spirit of these movements and the enthusiasm with which we sing the company anthem and solemnly recite our vision / mission.
Outside of work, what do you do for fun to make the most of your Indonesian experience?
It is important to have a good social network, and I enjoy the company of both expatriate and local friends. In Jakarta, I like to explore new places and spend time with my girlfriend, doing Bikram yoga, and try my hand at indoor gardening and cooking new dishes inspired by local ingredients. For the weekend outside, I can not get enough of climbing majestic volcanoes of Indonesia and explore the many islands.
Thank you, Thomas. To contact, please email thomas.tan@tunasgroup.com