Business / Corporate

Toyota resisting price hikes in Indonesia's hot minivan market

by Merliyani Pertiwi

Nna/kyodo

Toyota Motor Corp. and its group firm Daihatsu Motor Co. are trying to keep their prices steady in Indonesia’s increasingly competitive and affordable minivan market, offering 2019 models at the same prices as last year.

PT. Toyota-Astra Motor launched new models of the Avanza and the Veloz last week, while PT. Astra Daihatsu Motor introduced its Grand New Xenia.

Henry Tanoto, vice president of Toyota-Astra Motor, known as TAM, said the company set the prices for the new models after studying production costs, exchange rates and expected sales volume as well as acceptable retail price ranges.

“We have decided that the prices should be the same as in 2018. Hopefully Indonesian people will find them acceptable,” he said.

Astra Daihatsu Motor, a local Daihatsu unit known as ADM, has decided against price increases in a gesture of appreciation to loyal customers.

“New Xenias can be owned at the unchanged prices. It’s a manifestation of our commitment to our customers,” said Amelia Tjandra, ADM marketing director at Daihatsu BSD Astra Biz Center in South Tangerang on Java.

Toyota and Daihatsu began producing low multipurpose vehicles, or LMPVs, an affordable range of MPVs also known as minivans, in Indonesia in 2003.

Avanzas and Xenias are popular, but they are facing increasingly fierce competition from Japanese rivals — Suzuki Motor Corp.’s Ertiga, Nissan Motor Co.’s Livina, Honda Motor Co.’s Mobilio and Mitsubishi Motors Corp.’s Xpander and Wuling.

Yoshihiro Nakata, TAM president, said even though Toyota’s LMPVs still lead the Indonesian market, the company is concerned about competition, noting that the “LMPV market competition is getting tighter.”

TAM remains optimistic that Avanza will maintain its large market share of nearly 30 percent in Indonesia, accounting for more than 70 percent of Toyota’s total wholesale figure.

“Our sales have been increasing steadily every year. In the January-November period, total Avanza sales at the wholesale level were 75,493 units, with a market share of 28 percent,” TAM’s Tanoto said.

“With (the introduction of) the more stylish and modern model, we have set the market share target for this year at 30 percent.”

This year Toyota predicts Indonesia’s LMPV market will grow around 5 percent. Toyota has set the sales target for the new Avanza and Veloz within a range of 7,000 to 7,500 units per month, Tanoto said.

“Currently there are a total of seven brands competing in the LMPV segment,” ADM’s Tjandra said. “We must build a stronger strategy so that this year’s sales, especially those for Xenias, will increase by 20 percent compared to last year.”

The Association of Indonesia Automotive Industries forecast that domestic vehicle sales will increase by 5 percent to 1.05 million units this year on the back of the government’s solid economic growth target of 5.5 percent, but the combined LMPV sales target by carmakers is estimated to be around 1.1 million units.

“Therefore, it is possible that the automotive industry will not easily increase prices for new models,” Jongkie D. Sugiarto, chairman of the association, told NNA. Based on association data, LMPVs have a 30 percent share of total vehicle sales

Coronavirus banner