GM Takes On Toyota With No-Frills Spin
As far as emerging markets go, Indonesia is one of the hottest. “The country of 240 million people bought one million cars last year, and sales by some estimates are expected to double over the next three years,” says Reuters. The only trouble: Most of the cars are and will be Toyotas. GM wants to do something about it with a no-frill people mover designed in Brazil.
Priced at 139.7 million rupiah ($14,360), the Chevrolet Spin hit showrooms in Indonesia in early May, and was an instant success. “In June, GM sold 1,294 Spin vans, powering the company to sell a total of 1,761 cars that month. While still small, the volume was respectable compared to the company’s annual volume of 5,277 cars last year,” s ays Reuters. “But GM is still miles behind its Japanese rivals.”
“We started in Indonesia in 1938. We have been so successful, we have seven-tenths of a point of market share in 75 years. Are you kidding me?” Tim Lee, head of GM’s international operations, told Reuters. “That is not constancy of purpose.”
Japanese automakers have more than 90 percent of the 1.1 million unit market that is expected to grow another 10 percent this year. More than half of the cars are made by Toyota companies. Toshiyuki Shiga, COO of Nissan, calls Indonesia the “Toyota Republic.”
GM’s Spin is assembled in a reopened plant that GM had shuttered in 2005. Even at full capacity of 40,000 Spins, it would make only a small dent into the market.
Developed by GM’s Brazil engineering center on a Gamma platform, the seven seater, three row people mover is powered by a 1.8 liter EconoFlex engine, and it is targeted at emerging markets. GM started shipping some of its Indonesia-made Spin cars to Thailand this month and expects to start exporting them to the Philippines next month.
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Its about time GM went after went after some of Japan Inc’s other markets. Shipping to Thailand and Philippines is also a good start. If GM can get a toe hold, maybe Ford, Fiat, VW etc. will want to get into the game. For too long no one bothered to compete against the Japanese giants. Now, it seems that is changing.
Sir I can assure I have no Japanese hatred. I worked for a Japanese company, Yokogawa, in the US in 2009. Being US, I do have a bias, which I admit, but we all have biases. My writing here is primarily aimed at the laziness of GM and others auto makers who have allowed Toyota and others Japanese auto makers to expand without even putting up a fight in some markets. But this article can also prove a point I have been pushing of Japanese protectionism. Why GM, Ford, VW, BMW, etc don't build in Japan, but GM is going forward into a much smaller market (Indonesia) completely dominated (90%) by the Japanese. This should pour cold water on the idea that foreign automakers have no interest to build in Japan, yet are now building all over the world. Why not in Japan?