General Motors, the world’s second-biggest carmaker, is trying to break the Japanese stranglehold on the popular family car market in Indonesia, where it sees the next auto boom after China.
Despite being in Indonesia for about 30 years longer than Japan’s Toyota and its affiliates including Daihatsu, the U.S. company is only a small player in Southeast Asia’s biggest economy. GM sold around 12,000 cars from January to October this year, whereas Toyota, the world’s biggest carmaker, sold more than 350,000.
General Motors is banking on multi-purpose vehicles, sport utility vehicles and compact cars to close the gap with its Japanese rivals, said Michael Dunne, who became president of the company’s Indonesian operations in September.
“The most exciting thing about Indonesia is it reminds me of China about a dozen years ago, early 2000s,” said Dunne. “Population times per capita income equals opportunity for automakers. So when you have a massive population and you have that income threshold crossing $3,500, in country after country, without exception, that’s been a trigger of take-off.”
Since April this year, General Motors has been producing the Chevrolet Spin – a van with three rows of seats priced from 144 million rupiah ($12,000) – at its factory in the outskirts of Jakarta.
The country of 240 million people has bought more than 1.1 million vehicles so far this year, according to the latest industry data from Gaikindo.
Toyota and Daihatsu control more than half of that market and keep a tight grip on the local dealership network through their partnership with Indonesian conglomerate PT Astra International.
In response, General Motors, which is boosting its network of around 40 dealers in Indonesia, provides basic car maintenance and repairs directly to customers in their homes or offices.