Thomas Tan is Finance Director and Board member of PT Tunas Ridean Tbk, the largest independent automotive dealer group in Indonesia, and a part of the Jardine Matheson group, a Hong Kong-headquartered diversified conglomerate. Thomas takes the time to talk to us about his role, and his time in Indonesia.
Thomas, thank you for your time. Shall we start with your background and experience so far?
My family is Taiwanese on my mum’s side, and Malaysian on my dad’s. I was born in Malaysia, but my family moved to Australia when I was six. I did undergraduate degrees in Commerce and Law in Sydney, and my MBA at INSEAD. I am an Australian CPA, 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 industry back in the Asia-Pacific region.
How did you come to be in Indonesia – what attracted you, and what has kept you here since then?
I was working in Jardine Aviation Services in Hong Kong when asked to consider a posting to Tunas in mid-2011. I met the founding family and was attracted to the dynamism of the company and Indonesia. At the time, people warned me to lower my expectations about everything here. My experience of life and work in Indonesia surpassed that bar, and I discovered I actually enjoyed the adventure and surprises it brings.
What does the Tunas Group do in a nutshell?
Tunas comprises three main businesses: automotive retail sales and after-sales for Toyota, Daihatsu, BMW, Isuzu and Peugeot cars, as well as Honda motorcycles; rental cars, for corporate clients; and the auto finance business MTF, which Tunas sold 51% of to Bank Mandiri in 2009, but which is still an important auto loan provider and close partner for us.
You’re in the automotive industry. What is your take on the recent developments with regards to fuel prices in Indonesia (and oil prices worldwide)? How does Tunas expect this to impact business?
It is fortuitous that oil prices have fallen so far for fuel subsidies to be cut without hurting consumers. Speaking in the interest of Indonesia, I think Jokowi should actually go further: keep the petrol price higher and scrap the diesel subsidy completely. A tax on petrol should be the ultimate aim, which could be adjusted downwards if needed as a cushion to future rises in the market price of oil. As for auto dealers like Tunas, I don’t think moderate rises in fuel prices will impact overall demand, as long as public transport remains a bad or non-existent alternative. Cars are also an aspirational goal for most Indonesian families. People will still buy despite increases in the cost of ownership, although higher fuel prices may shift consumer preferences towards more economical cars.
What do you see as the key challenges facing the automotive industry in Indonesia today?
Short-term, overcapacity in car production in Indonesia and rising supply in the face of static demand has hurt car dealer margins. Longer term, more infrastructure to accommodate the growing automotive population will be key to sustained growth. Increasing productivity faster than costs is also a challenge for maintaining profitability.
What growth plans does Tunas Group have for Indonesia?
We see good growth opportunities for cars in the new suburbs of Greater Jakarta, outside Java for motorbikes, and in second tier cities for corporate rental. We will continue to add new branches where the investment case is good, which is now difficult to see in Jakarta due to high costs.
There are strong growth fundamentals. As Indonesia prospers, car penetration will keep rising. More sales will come from outside Jakarta, which today still acccounts for almost 40% of national car sales. I believe Japanese brands will continue to dominate the market for both cars and motorbikes. Local production will rise, and should be competitive in the export market and future AEC.
The Tunas Group is an Indonesian company with strong ties to Hong Kong via Jardine Matheson. What is it like working with both cultures?
Jardines provide strategic oversight and advice on best practices and governance, but otherwise Tunas operates autonomously. Day-to-day, I am part of the Tunas fabric and I adapt to its 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 first perceptions of the key differences between working here and working in a highly-developed Asian country such as Hong Kong, and have those changed for you over time?
I found that people in Hong Kong were more efficient and required less follow-up and training than in Indonesia. That has generally stayed true, and I adapt accordingly. On the plus side, I find Indonesians nice to work with, respectful and naturally positive. In Hong Kong, people seemed unhappy about the things they didn’t have. In Indonesia, people are happy with the things they do have.
“Indonesians are people first. Smile and enjoy their warm company. Don’t impose your notions of quality and performance. Whatever issue arises, it can be worked out amicably.”
What have been the key challenges of living and working in Indonesia as an expat for you?
Once I overcame the language barrier, the key challenge became to constantly check my expectations and be calm and respectful, no matter the circumstance.
What advice would you have for expats coming to work here from other Asian countries?
Indonesians are people first. Smile and enjoy their warm company. Don’t impose your notions of quality and performance. Whatever issue arises, it can be worked out amicably. Read Indonesia Etc. by Elizabeth Pisani – a great book that encapsulates the trials but also charms of Indonesia.
What’s the best part of your day at work?
When I first arrive in the office, we greet each other with our company salute: the Salam I-Care. It’s a little corny for expats, but I love the spirit of these gestures and the gusto with which we sing the company anthem and solemnly recite our vision/mission.
Outside of work, what do you do for fun to get the most out of your Indonesian experience?
It’s important to have a good social network, and I enjoy the company of both expat and local friends. In Jakarta, I like exploring new places and spending time with my girlfriend, doing Bikram yoga, and trying my hand at indoor gardening and cooking new dishes inspired by local ingredients. For weekends away, I can’t get enough of climbing Indonesia’s majestic volcanoes and exploring the myriad islands.
Thank you, Thomas. To get in touch, please email [email protected]