Indonesia May Be The Next Big Emerging Market

Derek Kreindler
by Derek Kreindler
indonesia may be the next big emerging market

With the largest economy and biggest population in Southeast Asia, Indonesia also has one of the lowest rates of car ownership. Although the market is set to expand by more than 50 percent in five years, Toyota dominates 90 percent of that market – and General Motors wants a piece of it.

Indonesia’s best-selling car is the Toyota Avanza, a Dihatsu-engineered rear-drive minivan that’s also exported to other developing-world markets. GM, which has around 1 percent market share, will build minivans in Indonesia in the near future. GM hopes to corner a segment that is expected to be in high demand as members of the working class look for practical, utilitarian vehicles. Tata, Ford, Suzuki and Hyundai are also eyeing Indonesia, which could displace Thailand as the region’s automotive capital.

Rising interest rates and decreasing fuel subsidies may prove to be stumbling blocks in the rapid expansion of Indonesia’s auto market. But government incentives for small, low-emission cars should act as a counterweight. Indonesia had 32 vehicles per 1,000 people in 2010, compared to 132 in Thailand and 300 for Malaysia. Indonesia’s population is larger than both countries combined.

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  • Alluster Alluster on Jan 25, 2012

    "There is still no info about what GM’s offerings will look like, or any information whatsoever except it’s a MPV. How big will it be? What configuration (RWD? FWD? Front, rear, mid engine?)" Maybe its the Captiva which IIRC they sell in Thailand and Japan. The only other MPV GM has is the Orlando which is more suitable for countries like Indonesia instead of selling Lambda's over there. I cant believe one company owns 90% of the market, though it shouldn't come as a big surprise since indonesia is predominantly muslim and if sales in US are any indication, they love their toyota's. Which begs the question, is an american company like GM viewed favorably there?

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    • MrWhopee MrWhopee on Jan 25, 2012

      No, the captiva is already on sale here, they came from Thailand. They were pretty successful in the SUV market, especially for outfielder like Chevrolet. The diesel version was well regarded. I doubt the Lambdas have much appeal outside the US. They're simply too big for much of the world. And too extravagantly powered. Also, I don't know if being predominantly Muslims have anything to do with it. Toyota simply hooked their claws early and stick by it over the years. Many other automakers like GM, Ford, Nissan, simply disappeared and has only reappeared in 1990s. And when they were here it was a token attempt at best, not doing it seriously, not investing heavily. So Toyota is reaping the rewards now, and they have to start over at a very disadvantageous positions. I doubt Toyota is considered more appropriate for a Muslim than any other brand. After all, they're from Japan!

  • Garak Garak on Jan 25, 2012

    If that Avanza was available where I live, I'd buy it instantly. A RWD minivan about the size of a VW Golf? Yes please.

    • MrWhopee MrWhopee on Jan 26, 2012

      If you're thinking about sports car RWD antics, perish the thought. Handling is only so-so, and extreme maneuvers is likely to flip the car altogether, given its tall, narrow stance. Though the acceleration is quite acceptable, at least from low speed, as the gearing is incredibly short. I guess Toyota is anticipating families going up steep inclines with full loads of seven passengers and lots of luggage.

  • NN NN on Jan 26, 2012

    Does GM sell the Wuling vans there? Seems to be the natural offering for that market...inexpensive, basic, fuel efficient, can carry quite a load. I was in Bali in 2003 and I remember the predecessors of the Avanza, the weird quasi-minivan cars ruled the roost there. I rented and drove an old Suzuki Samurai around...probably the most dangerous thing I've ever done in my life.

  • Silverkris Silverkris on Jan 26, 2012

    Toyota had a head start in Indonesia over other motor vehicle companies, so it's not surprising they have a huge market share, though I was surprised it's 90%. I remember that they have a local partner (probably required by law) called PT Astra, which also reps other motor vehicle companies like Isuzu, Daihatsu, Peugeot. Do they still make the Kijang, which is a SUV model that is sold in Asian markets, like the Philippines (called the Tamaraw there)?