Competition in Indonesia’s automotive sector revs up

South East Asia’s automotive sector has recorded impressive growth over the last decade. With 1.2 million vehicles sold in 2013, Indonesia is spearheading this phenomenal growth story. Recognizing the growth potential, the South East Asia Automotive Summit 2015 gathered industry leaders and government officials to discuss key industry trends, opportunities and threats.

Jeffrey Bahar, Deputy Chief Executive Officer of the Spire Research and Consulting group, was honoured to be invited as a guest speaker at the South East Asia Automotive Summit 2015. In his presentation, Bahar spoke about Indonesia’s rapidly advancing automobile industry giving centre-stage to the Low Cost Green Car/ Low Emission Car (LCGC/LEC) segment.

Bahar noted that the Indonesian automobile market story was very different in 2014. It was plagued by slow annual growth (around 5%), the falling Indonesian Rupiah, political uncertainty and post-election disputes. Inflation, luxury taxes, pull-backs in subsidized fuel and subsequent tariffs hikes further stunted demand.

However, an expanding middle-class population of 100 million, rising consumer confidence, low interest rates for car credit (5-6%) and an expected growth of 5-7% (year-on-year) in the Gross Domestic Product (GDP) in the next five years will be primary growth drivers for Indonesia’s auto segment.

Interestingly, within 18 months of a new initiative launched in 2014 introducing Low Cost Green Car/Low Emission Cars (LCGC/LEC), domestic sales for LCGC reached 223,000 units. The cars were lauded for fuel efficiency and lower prices. Manufacturers hope that this segment will take off among price-sensitive consumers.

Nonetheless, challenges remain. Manufacturers need to ensure low-cost production without sacrificing quality. Moreover, intense competition from established players might muscle out new entrants. Established players – with Toyota Agya on top – could continue to dominate domestic sales.

Bahar’s presentation deck on “Indonesia Automotive Insight: The New Era of LCGC/LEC” can be found here.

https://www.spireresearch.com/newsroom/events/competition-in-indonesias-automotive-sector-revs-up/

Comments

Android market in India

- Saurabh Sharma, Country Manager, Spire Research and Consulting India can easily be considered as an Android country since 91% of its market share belongs to devices using Google’s mobile operating system. It is an open-source, Linux-based operating system designed specifically for smartphones and computer tablets. This facilitates easy accessibility for programmers to provide enhanced services as well as improve the core functionality of the device. According to statistics, the Android platform has breached 80% market share globally in the third quarter of 2013. With 40 million smartphones in the country, Indian users have an easy access to smartphones to stay connected online. With more consumers wanting to get their hands on smartphones and computer tablets, this has unsurprisingly pushed for the dominance of Androids across markets. Moreover, Androids is adopted by all major smartphone players in India – local players such as Karbonn and Micromax, as we...

FIFA World Cup 2018 holds lessons for successful team building

The FIFA World Cup 2018 is widely seen as one of the best World Cups in recent memory, with many surprises and goals aplenty. One talking point was the role of teamwork as opposed to just superstar talent. What lessons can businesses learn from the beautiful game? Leon Perera, CEO of Spire Research and Consulting, shared his thoughts in The Business Times – Views from the Top section on 23 July 2018. As World Cup fever draws to an end, the game lived up to its hype with breath-taking goals and outstanding performances. Perera highlighted the role of 'team effort' over mere individual talent, which was evident in the early failure of teams with world-class superstars like Argentina and Portugal. Perera also pointed out the importance of investing in new talent pipeline development, which paid rich dividends for France, the winning team and also one of the youngest teams in the World Cup. The game also highlighted the role of risk-taking. A relentless approach t...

2022: Recovery or Resurgence?

The Covid-19 pandemic officially marks a grim second year this year. Nonetheless, there is some optimism among scientists that while the virus will become endemic, its threat to human life could reduce over time. In the first of a three-part Spirethoughts instalment examining analysts’ predictions for the new year ahead, we look at 3 economic and social trends that are likely to affect the global economy in 2022. Debt and inflation to grow . Global debt accelerated during the pandemic as governments continued to borrow. Twenty-five nations, including the US and China, now have total debt amounting to more than 300% of GDP, as central banks contribute to inflation by printing money, deepening the debt trap. Inflation, while on the rise, seems unlikely to hit the historic double-digit levels of the 1970s, as government spending should ease in 2022. Industries overheat amid global warming “greenflation”. The other continuing story with global imp...

Amazon enters the healthcare sector

Amazon is eyeing the healthcare sector. It has rolled out a line of private label, over-the-counter medicines along with medical supplies for hospitals, doctors and dentists. Whether it is selling prescription or generic drugs, Amazon seems poised to disrupt the healthcare industry. However, Amazon faces its own share of hurdles. It will need licenses from each state to be able to sell medical supplies. Medical practitioners may prefer to stay loyal existing sales channels. Waiting 24 to 48 hours for a pain or cold medicine means that customers may still run to the nearest pharmacy. Will Amazon disrupt the healthcare industry? Read more here: https://www.spireresearch.com/newsroom/spirethoughts/amazon-enters-the-healthcare-sector/

Asia-Pacific nations poised to sign the world’s largest multi-lateral trade agreement, RCEP, in 2020

After six years of negotiations, more than a dozen countries in the Asia-Pacific are poised to sign the world’s largest trade agreement, known as the Regional Comprehensive Partnership (RCEP), in 2020. This agreement would boost commerce among participating countries by lowering tariffs as well as standardizing customs rules and procedures. The RCEP will widen market access, especially for those countries that do not have existing many bilateral trade agreements in place. Will India pay a price for its decision to stay out of the RCEP? Read more: https://www.spireresearch.com/newsroom/spirethoughts/asia-pacific-nations-poised-to-sign-the-worlds-largest-multi-lateral-trade-agreement-rcep-in-2020/

The Knowledge to Decide

Search This Blog