Japanese Automakers’ Adaptability Garnered Strong Auto Sales In Indonesia

Indonesia: Japanese automakers hold a significant market share—98.39 percent—in Indonesia’s automotive market, and their position is forecast to remain the same both in the short and long term, according to the Indonesian Automotive Industry Association (Gaikindo).

The top five Japanese car brands in the country are Toyota, Daihatsu, Honda, Mitsubishi and Suzuki, respectively.

Since the 1970s, Japanese cars have appealed to Indonesian consumers, which make it harder for western automakers to enter and compete in the market. Automakers from Europe, the US, China, Malaysia and South Korea that have entered the Indonesian market found it difficult to compete with Japanese automakers who have already gained a stronghold in the market.

For example, South Korean automakers Kia and Hyundai’s market shares in Indonesia decreased from 5.12 percent in 2001 to 0.21 percent in 2017.

Automakers that are keen on entering the Indonesian car market need to be able to adapt to consumer’s needs in the country as well as adhere to the country’s regulations for the industry.

A key reason Japanese cars appeal to Indonesian consumers is the ease of re-selling the vehicles on the second-hand market, according to Herry Yanto, sales and marketing development manager, Kia Motors Indonesia.

Moreover, Japanese automakers have invested in Indonesia’s car components industry, making it accessible as well as cheaper to order car components or parts for a Japanese brand than it is for a non-Japanese brand. The Japanese brands also have a large amount of Indonesian car dealers supplying their brands, accompanied by strong advertising campaigns.

Jongkie Sugiarto, chairman, Gaikindo, advises Western automakers who want to increase their market share in Indonesia to invest in car component manufacturing facilities in the country.

Another key factor to the success of Japanese automakers is their keenness to adapt to new regulations in Indonesia.

For example, in the 1970s the Indonesian government declared that foreign automakers had to appoint a local agent to distribute their cars and the Japanese automakers complied with the regulations promptly—with Toyota and Daihatsu appointing Astra International for vehicle distribution.

In 2010, the Indonesian government started to grant tax incentives to automakers that use at least 80 percent of locally-sourced materials and components for vehicle production, which launched the popularity of low-cost green cars (LCGC) in the country. Toyota, Daihatsu, Honda, Nissan and Suzuki promptly invested in this and are now the engines behind LCGCs in the country.

Automakers that are determined to enter the largest market in Southeast Asia need be willing to invest as well as understand the future developments in Indonesia’s automotive industry.

Check these articles out:
● Renishaw Shares Outlook On Vietnam And Philippines
● igus R4.1L Series Of Enclosed Energy Tubes
● Dyson Terminates Electric Car Project In Singapore
● Automotive Industry Efficient Machining For New Materials
● Thailand To Establish Committee For Electric Vehicles
● TÜV SÜD And thyssenkrupp Innovations Sign MoU To Develop Additive-Manufacturing-Enabled Eolutions In APAC
● OMRON Releases E2EW Series Durable Full Metal Proximity Sensor
● Manufacturing Sector Maintains Growth Trajectory Amid Challenging Market Conditions
● Collaborative Robotics Market Value To Reach $9.7 Billion By 2025
● Vietnam Experiences Influx Of Japanese Investments

WANT MORE INSIDER NEWS? SUBSCRIBE TO OUR DIGITAL MAGAZINE NOW!

FOLLOW US ON: LinkedIn, Facebook, Twitter