With Europe still falling and China’s growth diminished, carmakers have a new Holy Grail market to turn their attention to: the growing markets in Southeast Asia, like Indonesia.
With car demand slowing in China and reversing in India, global marques with excess capacity are retooling their strategy in southeast Asia and taking bold steps into previously overlooked markets such as Indonesia, Malaysia and even Myanmar.
A new range of “low-cost, green cars” is what global manufacturers are hoping will turbocharge growth in a thriving market at the forefront of the automotive boom in Southeast Asia.
“The Asean nations such as Indonesia, Malaysia and Thailand form one of the regional ‘clusters’ that we believe should be on the growth list of every [carmaker] and supplier,” says Xavier Mosquet, senior partner at the Boston Consulting Group in Detroit. “For players in Europe, the US, and Japan, geographic diversification has never mattered more than it does today in order to balance local economic storms.”
Japanese manufacturers such as Honda, Nissan and Toyota have led the way in Southeast Asia, rolling out low-cost models, but this is also attracting new entrants such as India’s Tata Motors, which is considering developing an Indonesian version of its ultra-cheap Nano, to GM, which reopened its Indonesian factory earlier this year after a long hiatus.
Toyota and its subsidiary Daihatsu, which control about half of the Indonesian car market, were first to launch their new small cars, alongside Honda. Suzuki is still finalizing its version of a local small car, which the government requires to have an Indonesian brand name and, eventually, 80% local parts.
Via Financial Times
) - Monday, October 7th, 2013 - filed under Industry
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