General Motors sees China-like take-off in Indonesian car market

Tue Dec 10, 2013 7:55am EST
 
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By Eveline Danubrata

JAKARTA (Reuters) - General Motors Co (GM.N: Quote), the world's second-biggest car maker, is trying to break the Japanese stranglehold on the popular family car market in Indonesia, where it sees the next auto boom after China, a senior executive said.

Despite being in Indonesia for about 30 years longer than Japan's Toyota Motor Corp (7203.T: Quote) and its affiliates including Daihatsu Motor Co Ltd 7262.T, the U.S. company is only a small player in Southeast Asia's biggest economy.

The U.S. company sold around 12,000 cars from January to October this year, whereas Toyota, the world's biggest car maker, sold more than 350,000.

General Motors is banking on multi-purpose vehicles, sport utility vehicles and compact cars to close the gap with its Japanese rivals, said Michael Dunne, who became president of the company's Indonesian operations in September.

"The most exciting thing about Indonesia is it reminds me of China about a dozen years ago, early 2000s," Dunne, a former car consultant who was also the author of a book on General Motors' strategy in China, told Reuters in an interview on Tuesday.

"Population times per capita income equals opportunity for automakers. So when you have a massive population and you have that income threshold crossing $3,500, in country after country, without exception, that's been a trigger of take-off."

Sales in Indonesia by some estimates are expected to double over the next three years.

Since April this year, General Motors has been producing the Chevrolet Spin - a van with three rows of seats priced from 144 million rupiah ($12,000) - at its factory in the outskirts of Jakarta.   Continued...

 
Workers make final checks on new Chevrolet Spin MPVs at a General Motors plant in Bekasi, on the outskirt of Jakarta, in this February 19, 2013 file photo. REUTERS/Enny Nuraheni/Files