In emerging Indonesia, Honda's Mobilio muscles in on Toyota's turf

Thu Oct 23, 2014 5:26pm EDT
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By Dennys Kapa and Aradhana Aravindan

JAKARTA/SINGAPORE (Reuters) - Honda Motor's (7267.T: Quote) Mobilio, a spacious yet affordable multi-purpose vehicle (MPV), has nearly doubled its market share this year, triggering a price war with Toyota Motor (7203.T: Quote) in Indonesia, the latest battleground for global carmakers.

Toyota and its Daihatsu Motor 7262.T affiliate have long enjoyed a more than 50 percent market share in Indonesia - where car ownership is less than 4 percent in a population of close to 250 million. This emerging market with a growing middle-class keen to upgrade to four wheels from two, is a key target for global carmakers facing slowing demand in the United States and Europe.

For much of the past decade Toyota and Daihatsu were alone in offering the lower-range MPVs - dubbed 'people movers' locally - that are popular among family-oriented Indonesians. That market grip has seen off attempts by General Motors (GM.N: Quote), Nissan Motor (7201.T: Quote) and others to dethrone them.

But the Mobilio, a 7-seat MPV with a starting price of around $13,500, is now proving a serious challenger, with sales of about 67,000 since its January launch, driving the company's Indonesian market share up to 13.6 percent. Toyota Group's market share has dropped to 48.7 percent at end-September from above 54 percent five years ago, according to data from their distributor PT Astra International (ASII.JK: Quote).

Lower-range MPVs, including Toyota's Avanza and the Daihatsu Xenia, make up over a third of industry sales in Indonesia, says Davy Tuilan, marketing director of PT Suzuki Indomobil Sales, a unit of Japanese rival Suzuki Motor (7269.T: Quote).

"The Indonesian market is now more open, because everybody is ready with a product line-up in low-cost green cars (LCGCs) and the low MPV segment," he said. LCGCs are a special category in Indonesia that qualify for some tax breaks.


A Honda Mobilio car is pictured at the production line at a Honda plant in Greater Noida on the outskirts of New Delhi July 21, 2014. REUTERS/Adnan Abidi