Indonesia set for auto sales boom in 2013

The Indonesian Automotive Industry Association (Gaikindo) said that car sales – a key consumption indicator in Southeast Asia’s largest economy – might top 1.2 million units in 2013, which would be up 10 per cent from the 1.1 million units that were estimated sold in 2012.

Gaikindo said that demand would increase after the roll out of several new models, particularly low-cost and eco-friendly “green cars”.

Indonesia’s biggest auto-seller, Toyota Astra Motor (TAM), is aiming to keep its share of the domestic car market at just over one-third.

The firm, which distributes cars made by Toyota Motor Manufacturing Indonesia (TMMIN), sold 371,584 units between January and November last year, accounting for 36.19 per cent of the nation’s overall four-wheeler sales of 1.03 million units. 

“A significant part of growth will be derived from our new model – the Toyota Agya – which is expected to make up around 20 per cent of our overall sales in 2013,” TAM marketing director Joko Trisanyoto recently said.

TAM currently depends on sales of its Toyota Avanza multi-purpose vehicle. MPVs comprise the largest segment of the nation’s four-wheeler market.

The Toyota Agya, unveiled to the public in September, is an eco-friendly car that TAM developed with Astra Daihatsu Motor (ADM), under the government’s fuel efficiency-programme.

Sales of the Agya are still waiting for promulgation of a long-discussed government rule on low-carbon-emission programmes to provide incentives for manufacturing and selling eco-friendly cars.

Daihatsu, the nation’s second-largest car seller, is predicting that increased middle-class purchasing power will continue to drive sales, hoping to increase its market share to 15 per cent in 2013, which would be up slightly from last year, when the firm delivered 139,544 units in the January-to-November period, comprising 13.59 per cent of total sales.

“Competition will be harder, and it will be good for us to retain our market share,” ADM marketing director Amelia Tjandra said. 

Apart from a boost from the MPV Xenia, Daihatsu is expecting significant sales of the Daihatsu Agya, which is aimed at the nation’s middle class with a 100-million rupiah (Bt310,000) price tag, according to Amelia.

Daihatsu expected to sell about 3,000 Agyas a month, which would be 20 per cent of its monthly sales, apart from the Xenia, which was expected to comprise 40 per cent of the firm’s sales, she said.

With total auto sales hitting the 1-million mark, Indonesia, the world’s fourth most populous nation, has already become one of the world’s biggest car markets, although its scale is still dwarfed by China or India.

The nation has entered a high-growth zone, with about 80 vehicles per 1,000 people now, according to global analysts Frost and Sullivan, who predicted that Indonesia’s car-ownership rate would likely climb to 300 vehicles per 1,000 people in 2025, when the national gross domestic product is expected to surpass $4.6 trillion.

In anticipation of the continuing boom, top global auto-makers have expanded massively in Indonesia, investing more than $2 billion in the nation last year, which was followed by a similar $2.4-billion in investments from spare parts and components manufacturers.

Japan’s top auto-maker Toyota Motor Corporation, for example, has recently reaffirmed a commitment to invest up to 13 trillion rupiah in the next five years in Indonesia. 

Prominent car-makers outside Japan have also entered the local market. US-based General Motors, for example, is investing $150 million to revive production at its plant to manufacture 40,000 cars a year for domestic sales and exports, while India’s leading auto company, Tata Motors, is slated to launch its iconic city car, the Tata Nano, early this year as part of initial steps to penetrate the fast-growing market.

Davy Tulian, the sales director of Suzuki Indomobil Sales, acknowledged that the market would stay “prospective”, but would become “very tough” as auto-makers stepped up efforts to book stronger gains.

“Despite the competition, we are targeting to boost our share of the market to 14 per cent from 11.4 per cent,” he said, which he attributed to full-year sales of its new MPV, the Suzuki Ertiga, a completely-knocked down vehicle from India, that so far has received a warm response from the local market. Introduced in April, Ertiga reached customers in June and has made inroads in the segment.