General Motors Hoping to Gain Market Share On Dominant Toyota in Indonesia

Every day, a story comes out about growth of car sales in emerging markets. From ultra-luxury brands to entry-level basic transportation, the potential upside growth in emerging economies has brought these former sales backwaters to the forefront of industry attention. Toyota is a dominant player in many emerging markets, but perhaps nowehere as dominant as Indonesia, where Toyota and its brands control an almost unprecedented 54 percent market share. But that’s not stopping some other companies from challenging the automotive behemoth.

According to a Reuters report, General Motors is making a concerted effort to chip away at Toyota’s dominance in the Indonesian market. GM’s presence in the Indonesian market pre-dates Toyota’s by several decades, but a series of botched joint-venture agreements, and some mismatched products to local tastes have resulted in GM holding a diminutive seven tenths of a point of market share.

Despite Toyota’s 800-lb gorilla reputation and commanding market share, GM is targeting a seven to 10-percent share in the Indonesian market within a decade. Despite its already dominant market share, Toyota is not taking the potential threat of GM lightly. The country’s largest Toyota dealer group is reportedly having some dealers sign loyalty agreements by which they agree not to take on GM franchises.

Key to GM’s growth in Indonesia is the basic Chevrolet Spin three-row SUV. Its design and features are specifically targeted to the tastes of the Indonesian market, which favors basic, rugged three-row people-mover type vehicles. It offers a choice of a 1.2 or 1.5-liter gasoline I-4 engine, or an available 1.3-liter turbodiesel I-4.

Source: Reuters

By Edward A. Sanchez