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

Egyptian-Israeli gas deal to boost bilateral trade

A USD15 billion deal has been announced between Israel and Egypt to export natural gas. Israel’s Delek Group has signed an agreement to supply 64 billion cubic meters of gas in a span of ten years to Egypt’s Dolphinus Holdings. The deal is considered a milestone ever since the 1979 peace accord, bringing Egypt a step closer to becoming a regional energy hub. However, the transportation of natural gas from Israel to Egypt is a challenge given the security risks. Will the Egypt-Israel gas export deal usher in a relationship of bonhomie and economic co-operation? Read more here: https://www.spireresearch.com/newsroom/spirethoughts/egyptian-israeli-gas-deal-to-boost-bilateral-trade/

Spire speaks on Omni-channel strategies for Indonesian retailers

Spire was honored to participate in the Samsung Top Achiever Retailer (STAR) event held on 22 August, in Jakarta. Albertus Edy Rianto, Senior Manager, Spire Indonesia, shared his insights on the significance of Omni – channel strategies for mobile phone retailers. Albertus discussed offline-to-online strategy, where multiple channels merge to help target customers across various channel platforms. He elaborated that more than 80% of Indonesian mobile phone retail sales in 2020 will still occur at physical outlets. However, 71% of Indonesians browse online for a while prior to shopping at a physical store. Factors that influence customers include better delivery conditions, storefront apps for better sales and even packaging. As customers become more tech-savvy and demanding, more consideration will be given to innovative payment processes and browsing more than one channel to make a purchase. As far as online purchases are concerned, 25% of customers still feel ...

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/

Prison ankle bracelets are all the rage in Brazil

With about 622,000 inmates, Brazil is home to Latin America’s largest and the world’s fourth largest prison population. Around 32,000 criminals sport one of the many types of ankle bracelets being used. Many others are on a waiting list. The authorities estimate that they can save anywhere from USD12,000 to USD 72,000 a year for every tagged inmate removed from prison. Will ankle bracelets allow more prison inmates to serve their sentences from home? https://www.spireresearch.com/newsroom/spirethoughts/prison-ankle-bracelets-are-all-the-rage-in-brazil/

Germany: The Eurozone’s economic powerhouse

Germany is the fourth largest global economy today. Its exports amounted to EUR107 billion in March 2015 – an all-time high since the 1950’s. Despite being the only European nation with a strong manufacturing base and rising employment rate, will Germany succeed to drive Eurozone’s stagnant economy? And what lessons does Germany’s economic success hold for the rest of the world? Germany’s resurgence With the second lowest unemployment rate in the European Union (EU) at 5.3 per cent, Germany’s economy has survived many setbacks. The economic success dates back to the Industrial Revolution due to the early adoption of coal production and rail transportation. Moreover, the fall of the Berlin Wall – the reunification of West and East Germany – and the expansion of the EU created huge market opportunities for Germany. Often regarded as the ‘Sick man of Europe’, Germany had almost lost hope of returning to rapid economic growth, undergoing recessions in 2003 and a dismal 1.2 p...

The Knowledge to Decide

Search This Blog