Small cars a turbo-boost for Indonesia
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Cheap, fuel-efficient autos to form new segment of market
The presence of more affordable, fuel-efficient cars will help create a new segment in Southeast Asia’s second-largest auto market, experts say.
Dushyant Sinha, associate director of Frost and Sullivan’s automotive and transportation division for Asia Pacific, said the government-backed “low-cost green car” (LCGC) programme would allow established manufacturers with strong brands and models to sell their products at low prices.
Cars sold for less than 100 million rupiah (Bt269,536), the benchmark for the low-cost category, have actually already entered the domestic market, such as the Chery QQ from China.
But its market share has remained small, Sinha said.
“With more choices, a new segment is likely to emerge, even though some cannibalisation of existing entry-level segments is inevitable,” he said.
Driven by a new government incentive to eliminate the luxury-goods sales tax, several auto-makers have started to venture into the low-cost car market.
Toyota Astra Motor (TAM), Astra Daihatsu Motor (ADM) and Honda Prospect Motor (HPM) are offering the Agya, Ayla and Brio Satya, respectively.
Nissan Motor Indonesia also recently announced that it would deliver its multi-purpose vehicle (MPV) Datsun GO+ and hatchback Datsun GO next year to join the market.
Auto-makers with products ready are very upbeat and believe their new vehicles will sell.
Daihatsu, for instance, said it planned to sell 15,000 Aylas until the end of this year, while Toyota – which sourced its Agyas from Daihatsu’s production facility – also had a similar estimated sales target.
Nissan, which will kick off production of the Datsun-brand cars next year, said they would help the brand attain its goal of securing a 15 per cent share in the Indonesian automobile market by 2016, significantly up from 6 per cent at present.
Automotive expert Achadiyat Asiandi Suhadi echoed Sinha’s view, saying the “inexpensive” cars would mainly capture price-sensitive customers in Indonesia who belonged to the growing middle class.
Citing the presence of city cars and MPVs in the low-cost programme, he underlined that it was the price, instead of the products, which determined the market.
“Buyers of this type of cars will mostly be people who are first-time buyers. Once they buy this car, they will not buy another due to limited purchasing power,” he said.
Achadiyat acknowledged that the new type of cars would absorb consumers who currently rely on used cars.
