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fter achieving success with its Honda Jazz in the hatchback market, the Indonesian unit of Japan'€™s Honda Motor is currently preparing a new model to enter the low multi-purpose vehicle (LMPV) market, the largest but also tightest car market segment in the country.

Jonfis Fandy, the marketing and after-sales service director of Honda Prospect Motor, Honda'€™s joint venture in Indonesia, said that the LMPV car was specifically designed for the Indonesian market.

'€œWe have done the research beforehand to figure out what the consumers need,'€ said Jonfis on Thursday during the presentation of the car'€™s sketch.

The new car will have a 1,500cc capacity engine with seven seats. The price for the car has not yet been specified, but '€œit is under Rp 200 million [US$19,800] for sure'€, he said.

Honda will showcase the prototype of the new LMPV at the Indonesia International Motor Show 2013 next September. Production will start next year at the new Honda factory in Karawang, West Java, he added. The new plant is scheduled to operate in the first quarter of 2014, with a capacity of 120,000 units per year.

Jonfis said that the LMPV car would use 80 percent local components, while the other 20 percent would come from Japan and Thailand.

Honda is leading the market in the sedan segment, with Honda City and Honda Civic sales dominating more than 60 percent of market share. Besides the two sedans, Honda'€™s growth is also driven by its hatchback Honda Jazz. In the first semester of 2013, Jazz contributed the most sales with 16,056 cars being sold or about 41 percent of the country'€™s hatchback car market. In June alone, about 2,510 were sold.

Jonfis said that Honda targeted the sale of 100,000 cars this year, an increase of 30,000 cars from the sales recorded last year. In the first semester, this year, total sales already reached 49,342 cars, a 109 percent increase from the same period, last year.

Jonfis said the company decided to enter the LMPV market because it was the largest and most lucrative market segment. More than 70 percent of passenger cars sold in the country are LMPV cars with prices below Rp 200 million, he added.

In 2012, the sales in this market segment reached 342,000 cars.

'€œThis year we predict it will reach between 380,000 and 400,000 cars. Next year it could be more than that,'€ said Jonfis. In the new market, Honda will not only compete with market leaders Toyota Avanza and Daihatsu Xenia, but also several new comers, which have promised to be more affordable, as well as being more comfortable and safe.

In May PT Mazda Motor Indonesia (MMI) introduced Mazda VX-1, which was similar to Suzuki Ertiga in terms of engine, capacity and body. The price for this car ranges between Rp 178 million to Rp 191 million.

In April, General Motors'€™ Chevrolet launched its 7-seater MPV named Spin with a starting price of Rp 139.7 million.

Chevrolet Spin, which was designed for Southeast Asia and South Africa, comes in three types of engines, gasoline-based 1,200cc and 1,500cc, also 1,300cc diesel engine.

Japan-based automaker PT Nissan Motor Indonesia also launched Nissan Evalia, which is set to cost Rp 145 million and Rp 185 million in June 2012. Similar to most LMPV cars, Evalia also uses 1,500cc engines.

The Indonesian car producers association (Gaikindo) estimates total car sales will reach between 1 million to 1.05 million cars this year, down from1.12 million sales in 2012. (nai)