Citibank N.A as a major foreign bank has an image of prestige which is being supported by first class service and hospitality. In order to be have an account with Citibank, one must have a minimum balance of , thus Citibank's customers are those people in the middle and upper segments. Citibank is also well known for its corporate account and weak in the retail segments. All of these will be a disadvantage for Citibank to enter the retail market specifically in auto leasing industry due to its image. In addition, society perceived banks to be prudent and bureaucratic in making their decisions.

With the above barriers, Citibank has previously entered the auto loan market in 1988 but did not disburse the loan directly to the end users. This strategy have put Citibank in a weak position because they have no control over the disbursement of the loan to the end users, thus due to these circumstances Citibank have experienced difficulties because of fraud applications from its partner. The impact of the fraud was quite detrimental indeed, bad loans have increased significantly. Due to these instance, Citibank decided to foreclose/discontinue the auto loan program.

The growth of the Indonesian economy has created positive impact of the overall condition in leasing industry. The government was quite lean on its monetary policy for which have an impact on the growth of money supply and effect on interest rate. This situation have created and increased in the purchasing power of society which lead to increase demand towards goods and services which were also being supported by increased supply from the producer to meet the customers' demand.

The recent monetary crisis have put tremendous burden among multifinance company (MFC). Interest rate have gone up and MFC are more selective in approving their loans for the customers, There was also a decline in consumer purchase for durable goods, which was partly caused by the availability of consumer financing.

In these regards, we are currently studying the opportunities and feasibility for Citibank i to enter the auto leasing industry, If indeed the opportunities exists, then what are the strategies to penetrate the market and how will Citibank position it self among its competitors in order to gain competitive advantage which can enable Citibank to gain significant momentum during the current conditions and also to gain sizable or meaningful market share towards the long run.



Research Location: CITIBANK

Supervisor: Wiwiek M. Daryanto and Antarikso Abdulrahman

Accepted on [1999]



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