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GM to grab 10 percent share by 2020
Tail spin: An employee assembles a General Motors Inc
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Tail spin: An employee assembles a General Motors Inc. (GM) Chevrolet Spin on the production line at the PT General Motors Indonesia plant in Bekasi on Wednesday. (Bloomberg/Dimas Ardian) (GM) Chevrolet Spin on the production line at the PT General Motors Indonesia plant in Bekasi on Wednesday. (Bloomberg/Dimas Ardian)
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span class="inline inline-none">Tail spin: An employee assembles a General Motors Inc. (GM) Chevrolet Spin on the production line at the PT General Motors Indonesia plant in Bekasi on Wednesday. (Bloomberg/Dimas Ardian)
General Motors Co. (GM) expects to see its sales in the country increase 10-fold by 2020 as the United States' largest automaker is due to start delivery of its latest minivan, the Chevrolet Spin, to local customers this week.
Timothy E. Lee, vice president of global manufacturing and president of international operations said the reopening of its plant in Bekasi, West Java, would pave the way for the firm to boost sales and gain a stronger foothold in the country's car market, which for decades has been dominated by Japanese brands.
GM held less than 1 percent of the country's total car sales last year with 1.16 million cars sold.
Launching production in February, the plant, which was built with $150 million investment, is designed to produce 40,000 vehicles per year.
'The Chevrolet brand is very strong all around the world, and we have many countries where Chevrolet has 10 percent market share. So, that's sort of our visionary target, and it could be such in Indonesia,' Lee told The Jakarta Post in an interview in Jakarta on Thursday.
GM may seek more investment in the next few years to increase capacity to support the target, Lee said, but declined to go into detail.
'The Spin is the first car being produced here in Indonesia, but it certainly won't be the last,' he added.
With its broad portfolio, GM would also seek to introduce other models, including light commercial vehicles, according to Lee.
The Chevrolet Spin aims to attract Indonesian customers with three models: a 1,200 cc and 1,500 cc gasoline-based engine models, and one with a 1,300 cc diesel engine.
The entry of the Spin, which the firm describes as a 'perfect fit for the market', will increase competition in the multi-purpose vehicle (MPV) market, which is currently the meatiest segment in Southeast Asia's second-largest automarket.
With a price tag of around $15,000, the seven-seat vehicle will compete with other dominant players, particularly the Toyota Avanza, Daihatsu Xenia and the new Suzuki Ertiga.
During the first quarter of this year, Toyota still led the MPV market by selling 68,855 cars, accounting for 51.6 percent of the total segment, primarily due to sales of its Avanza, Innova and new NAV1.
Indonesia could potentially serve as a production hub in the Southeast Asian market, in addition to Thailand, where GM was now producing pick-up trucks, Lee said.
'We look at the ASEAN group of nations as a hub and obviously we are betting now on Indonesia in terms of more production, apart from Thailand. Indonesia will be a very important piece of that production market because of its own market plus the export potential within the region,' he said.
Emerging markets, not only Brazil, Russia, India, China and South Africa grouped in BRICs, but also others like Colombia, Vietnam, Egypt, Turkey and Indonesia, were important for generating GM sales, Lee said.
Around 80 percent of the overall factory's output would be allocated to the domestic market, where demand for four-wheel drive vehicles had grown rapidly, Marcos Purty, the president director of GM Indonesia, said on Thursday during the inauguration of the new plant in Bekasi.
'We will export 20 percent of the output to other Southeast Asian countries,' Purty said, referring specifically to the Philippines and Thailand.
During its initial phase, the production of the Cevrolet Spin would utilize around 40 percent of content sourced from ASEAN, and this could be increased in the upcoming years, Martin Apfel, the president of GM's Southeast Asia operations, said. GM would buy parts and components from 43 Indonesian suppliers to build the car.
Apart from GM, major auto giants, such as Toyota, Daihatsu, Honda, Nissan and Suzuki are also heavily investing to tap into the booming automarket in Indonesia, which due to its strong economic expansion, drove car sales to more than 1 million last year.
The local automobile industry expects car sales to rise by around 10 percent to 1.2 million this year.
