Indonesia: Toyota/Daihatsu each build a second plant for low-priced small cars

Nissan also boosts production capacity to produce eco cars that meet "Low Cost Green Car Program"

2011/12/09

Summary

 In 2010, production and new vehicle sales in Indonesia were 702,508 and 764,710, respectively, each up by slightly more than 50% as compared to the 2009 results that were affected by world recession. Sales volume in the January-October period of 2011 is 746,199 units, up by 19.3%.

 Indonesia is the fourth most populous nation in the world, with about 240 million people. Its automotive industry is in a stage of growth. Sales of vehicles in Indonesia are said to exceed those of Thailand, which is the largest market in ASEAN countries, in the near future. Due partly to the flooding in Thailand, vehicle sales in Indonesia surpassed those of Thailand by 32,357 units in the January-October period of 2011.

 In Indonesia, Japanese vehicles hold about a 95% market share. In 2010, Toyota had a 37.7% share and when combined with Daihatsu, holds more than 50% share of the market.

 Japanese OEMs expect the future expansion of the Indonesian market and are also enhancing their business in Indonesia as an export base that follows Thailand.

 Whereas multi-seat vehicles (such as Toyota Avanza and Daihatsu Xenia) are currently very popular in Indonesia, the Indonesian government plans to provide incentives to eco-friendly cars (low-priced compact cars) that meet requirements such as fuel economy and local-content ratio; each OEM is aiming to launch vehicles that meet the requirements.

 Toyota and Daihatsu will each build a second plant; Toyota is said to produce a compact car based on the Etios, which it launched in India, and Daihatsu is said to be planning to manufacture an even smaller 800-1000cc car, which will also be supplied to Toyota.

 Nissan will boost production capacity, planning to produce eco-friendly cars that the Indonesian government is currently promoting.

 Among heavy commercial vehicle manufacturers, Isuzu and Hino are enhancing their development and production structure as they consider Indonesia to be as important a base as Thailand.

 Among European, US, and Korean OEMs, GM, which withdrew from Indonesia in 2005, announced that it would resume production in 2013.



Production and sales in Indonesia: Production and sales in 2010 grew by slightly more than 50% from 2009, also registering a double-digit growth in 2011

 In 2010, vehicle production (all models) in Indonesia was 702,508 and sales volume was 764,710, of which "passenger cars and light commercial vehicles" were 742,034; production and sales volume both increased by slightly more than 50% from 2009. In the January-October period of 2011, production and sales volume grew by 20.3% and 19.3%, respectively.

 Japanese vehicles hold a 95% share of the market; among them, "Toyota and Daihatsu" has more than 50% share of the market.

Production/Sales volume in Indonesia

2006 2007 2008 2009 2010 Jan.-Oct.
2010
Jan.-Oct.
2011
Production 296,008 411,638 600,628 464,816 702,508 576,647 693,910
Sales 318,904 433,341 603,774 483,548 764,710 625,400 746,199
Source: GAIKINDO (The Association of Indonesia Automotive Industries)
(Note) 1. Sales volume in Thailand, which had been the largest market in ASEAN region, was about 800,000 in 2010. In the January-October period of 2011, 713,842 units (up 13.6% year-on-year) were sold, which is 32,357 units less than those in Indonesia due partly to the flooding in Thailand. (Sales volume in Thailand is the 10-month total of monthly preliminary figures that Toyota Motor Thailand announces).
2. GAIKINDO (The Association of Indonesia Automotive Industries) says that production by the automotive industry in Indonesia is currently coming close to 1 million and, that if the current growth rate continues, sales volume may amount to 2 million in five to six years (announced in July 2011).
3. According to Daihatsu, Indonesia is currently in the early stage of motorization and the demand is expected to increase from now on (Daihatsu Annual Report 2011).
4. For detailed information on vehicle production volume, see the table of break down by OEM at the end of this report.

 

Unit sales in Indonesia by OEM (Passenger cars and Light commercial vehicles)

Unit sales Market share
2010 Jan.-Aug.
2010
Jan.-Aug.
2011
2010 Jan.-Aug.
2010
Jan.-Aug.
2011
Toyota 280,989 190,808 207,850 37.9% 38.8% 36.8%
Daihatsu 118,591 75,838 87,661 16.0% 15.4% 15.5%
Toyota Group 399,580 266,646 295,511 53.8% 54.2% 52.4%
Honda 61,336 40,954 31,407 8.3% 8.3% 5.6%
Nissan 37,542 25,018 32,944 5.1% 5.1% 5.8%
Suzuki 71,210 46,102 60,446 9.6% 9.4% 10.7%
Mitsubishi Motors 55,652 36,352 49,484 7.5% 7.4% 8.8%
Mazda 4,503 2,986 4,240 0.6% 0.6% 0.8%
Subaru - - 165 0.0% 0.0% 0.0%
Isuzu 23,923 15,828 18,487 3.2% 3.2% 3.3%
Hino 8,604 6,147 6,361 1.2% 1.2% 1.1%
Mitsubishi Fuso 45,968 31,678 36,577 6.2% 6.4% 6.5%
Japanese OEMs total 708,318 471,711 535,622 95.5% 95.8% 94.9%
Hyundai Group 11,591 7,338 7,338 1.6% 1.5% 1.3%
GM 4,508 3,172 3,080 0.6% 0.6% 0.5%
Ford 8,877 4,085 11,110 1.2% 0.8% 2.0%
Fiat-Chrysler 120 34 475 0.0% 0.0% 0.1%
VW 534 185 623 0.1% 0.0% 0.1%
Mercedes-Benz 3,952 2,750 2,779 0.5% 0.6% 0.5%
BMW 1,240 829 977 0.2% 0.2% 0.2%
PSA 110 61 113 0.0% 0.0% 0.0%
Tata 93 62 75 0.0% 0.0% 0.0%
Proton 2,126 1,643 1,098 0.3% 0.3% 0.2%
Others 565 383 859 0.1% 0.1% 0.2%
Total 742,034 492,253 564,149 100.0% 100.0% 100.0%

 

Total sales volume (Note 4) 764,710 507,093 580,018
Source: MarkLines Data Center
(Note) 1. Passenger cars and light commercial vehicles with GVW of up to 3.5 tons are included. Heavy trucks are not included.
2. Mitsubishi Fuso and UD Trucks (referred to later) had expanded into Indonesia when they were Japanese OEMs and are included as Japanese vehicles.
3. Tata includes Jaguar/Land Rover. "Others" consists of OEMs such as China-based Chery Automobile.
4. Total sales volume includes heavy trucks.

 



Toyota: builds a second plant in Indonesia, start producing low-priced small cars in 2013

 In 2010, Toyota sold 281,000 vehicles in Indonesia, with a 37.9% share of the market. Toyota and Daihatsu hold a 53.8% share and when Hino is included, their combined share amounts to 55% (of the passenger car and light commercial vehicles market).

 In September 2011, Toyota announced that it would build a second plant in Karawang. The new plant is said to produce a small car based on the Etios (with 1200cc-1500cc engine), which was launched in India. The company plans to make the model meet the requirements of the Indonesian government's "low cost green car program."

 Toyota is also said to be planning to introduce an additional small car that is smaller (800-1000cc-class) than the Etios. The second small car will be supplied by Daihatsu.

 Toyota already has a dealer network of 200 and is currently having upper hand over other OEMs. The company is said to be planning to increase the number of dealers to about 300 in the medium and long run.

Toyota: builds a second Karawang plant, producing low-priced small cars

 In September 2011, Toyota announced that it would build a second plant adjacent to its existing Karawang first plant. The company will invest 26.3 billion yen and will begin production of 70,000 units of a new model per year at the beginning of 2013. The second plant is said to manufacture a small car that is based on the Etios, which was introduced in India at the end of 2010, and that meets the requirements of the Indonesian government's "low cost green car program."
 The Karawang first plant produces main models of the IMV series - Kijang Innova/Fortuner and Avanza - having a production capacity of 110,000 a year. It employs about 5,700 workers. The combined production capacity of the two plants will amount to 180,000 a year in 2013. (Note 2)
Source: Toyota press releases 2011.5.25/2011.9.13
(Note) 1. Currently, multi-purpose vehicles (MPVs) are very popular in Indonesia, but since there is a lot of traffic jam, the demand for small cars is said to increase in the medium run as young customers place emphasis on easy handling and seek driving pleasure.
2. The IMV series is a project that Toyota launched in 2004 to build a globally more optimized production/supply structure. The IMV series consist of five models-three models of pickup truck, a minivan, and an SUV.
Toyota: increase the local-content ratio from 75% to 85%
 Toyota intends to increase the local-content ratio of the Kijang Innova, which it produces in Indonesia, from the current about 75% to 85% within several years. Toyota has 89 tier1 suppliers, which are mainly Japanese suppliers, while Daihatsu has almost double the number of tier1 suppliers compared to Toyota and the local-content ratio is about 80%. Toyota will find new suppliers in the future as it cooperates with Daihatsu and Yamaha Motor Co., a motorcycle manufacturer. The motorcycle market is ten times the vehicle market and the local-content ratio is almost 100%.
 In addition, Toyota will produce suspension parts (currently importing from Thailand) in-house for the first time in its business in Indonesia at the Karawang second plant, which will start operations in 2013. The company plans to increase the local-content ratio and the types of parts to be made in-house.

Source: Nikkan Kogyo Newspaper 2011.9.15/2011.9.27

 

Daihatsu's production: Daihatsu builds a new plant with production capacity of 100,000 a year to start operations at the end of 2012

 Astra Daihatsu Motor, Daihatsu's subsidiary in Indonesia, is the largest OEM in Indonesia, holding more than 40% share of production. The subsidiary supplies slightly less than 60% of its production (models such as Toyota Avanza) to Toyota. In February 2011, the company announced that it would build a new plant with a production capacity of 100,000 a year to start operations at the end of 2012. Daihatsu's production capacity in Indonesia will increase to 430,000 per year.

 Although it has not been made public which model will be produced at the new plant, it is said that the new plant will manufacture an 800-1000cc-class low-priced small car and will also supply it to Toyota.

 In November 2011, Toyota Avanza and Daihatsu Xenia are fully-remodeled. Toyota Avanza has been produced by both Toyota and Daihatsu, but will be entirely manufactured by Daihatsu from now on, which will supply the product to Toyota.

 

Daihatsu's sales: Daihatsu targets a 20% share in Indonesia in 2013

 Daihatsu sold 123,000 units (15.5% share) in FY2010 and 69,000 (15.7%) in the April-September period of 2011. The company launched a new Sirion, which was fully remodeled in July(produced by Perodua in Malaysia), thus enhancing its lineup of small cars, aiming to boost its market share to 20% by 2013.

 Daihatsu exhibited the A-Concept at the Indonesia International Motor Show held in Jakarta, Indonesia in July 2011. The model is a small car concept, which Astra Daihatsu Motor planned and designed. The company is said to be planning to start production when the Indonesian government's eco-car measure is officially announced.

Daihatsu's production volume in Indonesia

FY2006 FY2007 FY2008 FY2009 FY2010 Apr.-Sep.
2010
Apr.-Sep.
2011
Daihatsu vehicles
Toyota vehicles
36,654
71,881
55,495
106,569
84,239
136,238
88,582
149,790
136,719
184,168
62,200
84,900
74,000
106,600
Total 108,535 162,064 220,477 238,372 320,887 147,100 180,600

Source: Daihatsu Financial Results

 

Daihatsu: builds a vehicle plant with production capacity of 100,000 a year to start operations at the end of 2012

 In February 2011, Daihatsu announced that Astra Daihatsu Motor, its subsidiary in Indonesia, would invest about 20 billion yen (excluding cost for site acquisition/site development cost) to build a vehicle plant with production capacity of 100,000 (2 shifts) a year.
 The new plant is said to produce a low-priced small car (with an 800cc-1000cc engine), which is developed based on models including the Mira e:S, which was launched in Japan in September, and also to supply the small car to Toyota.
Source: Daihatsu press release 2011.2.23
(Note) 1. Daihatsu repeatedly boosted the production capacity of Astra Daihatsu Motor's Sunter plant. Recently, the company increased the production capacity by 50,000 to 280,000 a year in January 2011, and further by 50,000 to 330,000 in May
2. In September 2011, Daihatsu launched the Mira e:S in Japan. The model boasts fuel economy of 30km/L in JC08 mode and 32km/L in 10-15 mode. The price of it ranges from 795,000 yen (including consumption tax).
Enhancement of lineup of small cars: Daihatsu fully remodels the Sirion and unveils A-Concept
 In July 2011, Daihatsu launched a fully-remodeled Sirion (Japanese name: Boon. Called the Perodua Myvi in Malaysia) small car. The price ranges from about 1.315 million to 1.418 million yen. Perodua, which is Daihatsu's production base in Malaysia, produces and exports the model to Indonesia.
 At the 19th Indonesia International Motor Show held in Jakarta in July 2011, Daihatsu exhibited the A-Concept (global debut). By utilizing know-how on small cars accumulated through mini car production, the A-Concept was developed as Daihatsu's subsidiary in Indonesia, Astra Daihatsu Motor, mainly planned and designed it. Into its compact body, the company condensed design, a spacious interior, and fuel economy, saying that it aims to develop the car as the closest partner

Source: Daihatsu press release 2011.7.25

Toyota Avanza and Daihatsu Xenia are fully remodeled and Daihatsu entirely produces the models from now on
 Toyota and Daihatsu fully remodeled a 7-seat minivan, Toyota Avanza (with 1300cc/1500cc engine)/Daihatsu Xenia (with 1000cc/1300cc engine) and launched them in November 2011. Taking into consideration the needs in Indonesia, the companies adopted the optimized ground clearance and diversified seat arrangement, and also improved fuel economy and ride comfort.
 The two companies jointly developed the Avanza/Xenia and launched it in January 2004. In 2010, Toyota sold 141,799 units of the Avanza and Daihatsu 65,901 units of the Xenia and ranked first and second, respectively, in terms of sales volume by model in Indonesia. The combined sales volume of the two models is 207,700 units, which is a 28% of the domestic sales volume in Indonesia. Incidentally, Toyota Kijang Innova (7 or 8-seat minivan) is ranked third at 53,824 units.
 Toyota Avanza, which is based on the monocoque structure, was produced at Toyota's Karawang first plant and Daihatsu's Sunter plant, but production at the Karawang first plant was discontinued in June and Daihatsu alone supplies the product. The Karawang first plant focuses on the production of Kijang Innova/Fortuner, which is based on the frame structure.

Source: Daihatsu press release 2011.11.9

 



Nissan: boosts production capacity from 50,000 a year to 180,000, also building a new engine plant

 In July 2011, Nissan announced a new mid-term business plan for the ASEAN region. The company says that it would boost sales volume in this region from 150,000 (a 6% share of the market) in FY2010 to 500,000 (15%) in FY2016.

 It announced that it would invest 25 billion yen in Indonesia. In September 2011, the company doubled its production capacity from 50,000 to 100,000; it will further enhance the capacity to 180,000 in 2013 and will also build a new engine plant. Nissan plans to make the Indonesian government's "low cost green car program" as a core for increasing sales in the region.

 In order to achieve this target, the company will increase the number of engineers in the development division from 15 to 35 in 2013 and further to 80 in 2016, thus enhancing the R&D function to boost the local-content ratio.

 In addition, Nissan opened a dealer for the Infiniti brand at the center of Jakarta in March 2011.

Nissan: boosts production capacity of its vehicle plant to 180,000 and builds a new engine plant

 Nissan plans to invest 25 billion yen in Indonesia. The company increased production capacity from 50,000 to 100,000 in September 2011 and will further boost the capacity to 180,000 by 2013 and will also build a new engine plant in order to produce engines for small cars. The number of employees will be increased from 900 to 2,500.
 The company makes the Indonesian government's "low cost green car program" as a core for increasing sales in the region. Nissan officially announced that it would participate in the program. (Note 1)
 The company will enhance the R&D function and to promote localization. It will expand NTCSEA-I(Nissan Technical Center South East Asia-Indonesia) and will increase the number of engineers from 15 to 35 in 2013 and further to 80 in 2016. Concerning new small cars, the company plans to increase the local-content ratio within the ASEAN region to more than 80% and to more than 50% in Indonesia. (The conditions of the incentive that the Indonesian government plans to introduce are said to be the price of vehicle below about 1 million yen and the initial local-content ratio of 40% and 80% in the future.)(Note 2)
 Nissan plans to increase the number of dealers from 54 to 78 in FY2012 and to boost the sales volume from 38,000 units (a 5.1% share of the market) in 2010 to 90,000 (10%) in FY2013.
(Note) 1. Nissan is said to be planning to use the V platform, which is used in the March that the company produces in Thailand starting in 2010, in the above low-priced compact car.
2. Nissan Technical Center South East Asia is located in Thailand and Indonesia and will increase the number of engineers from the current 120 to 370 by FY2016 in both countries combined.

 



Honda: had planned to introduce a new model from Thailand, but the flooding in Thailand makes it uncertain

 In 2010, Honda produced 56,000 units and sold 61,000 units in Indonesia. The company produces the Jazz (Japanese name: Fit), the CR-V, and the Freed at its plant in Jakarta and also imports from Thailand and sell the Civic, the Accord, and the City. Honda intends to export the Brio, which it started producing and selling in Thailand in May 2011, to neighboring countries. The company originally planned to introduce the model in Indonesia in 2012, but the flooding in Thailand has made it uncertain.

 



Suzuki: boosts production capacity and also builds a new engine plant

 Suzuki increased sales volume from about 45,000 in 2009 to 71,000 in 2010 centered on the Futura, a commercial vehicle that it produces locally in Indonesia (jointly developed with Mitsubishi, which also produces and markets the model locally as the Colt T120SS) and the APV multi-purpose vehicle.

 The company is reported to invest about 30 billion yen to boost production capacity of its vehicle plant from 80,000 to 100,000 and also to build a new engine plant.

 



Mitsubishi: introduces new models aggressively, aiming to boost sales

 In FY2010, Mitsubishi produced 43,992 units and sold 59,081 in Indonesia.

 The company produces locally in Indonesia the Colt L300 (a commercial vehicle based on the former Delica) and the Colt T120SS(a light commercial vehicle jointly developed with Suzuki and was launched in 1991), which still support Mitsubishi's sales in Indonesia.

 It plans to aggressively introduce new models. It sold 10,780 units of the Pajero Sport in FY2010, which it started importing from Thailand in FY2009. It plans to add an AT version to the 4WD model. In addition, the company makes available "a mine version," which features tires and bodies with enhanced impact resistance in the Triton pickup truck that it also imports from Thailand, aiming to boost sales by making available specially-equipped vehicles depending on the intended use.

 



Heavy commercial vehicle manufacturer: Isuzu and Hino boost production capacity significantly

 Isuzu will establish a Three Core Business Organization consisting of Japan, Indonesia, and Thailand, intending to make Indonesia into a CV (Commercial vehicles) base for emerging countries.

 Hino's Indonesian plant became a production base for light trucks (Toyota Dyna/Hino Dutro) in the Toyota Group in December 2009 and increased production capacity from 10,000 to 35,000. The company will further boost the capacity to 50,000 by 2012, fostering Indonesia as an export base for light trucks.

 Indonesia is the biggest market for Mitsubishi Fuso; of its total 2010 global sales of 140,681, the company sold 55,728 units in Indonesia(30,540 units in 2009). It plans to boost production capacity of its base in Indonesia by about 20% from 4,000-4,500 a month to 5,000-5,500 in 2011.

Heavy commercial vehicle manufacturer: Isuzu and Hino significantly enhance development and production structure

Isuzu  In its mid-term business plan for FY2011 to FY2014, Isuzu announced that it would make Indonesia into a core base of CVs (Commercial vehicles) for emerging countries (Isuzu intends to make Japan into a CV base for developed countries, Thailand into a LCV base, and Indonesia into a CV base for emerging countries). Isuzu plans to start operations of a new integrated plant that includes core parts including engines by 2014. Combined with the existing plant in Jakarta, the company will double its production capacity in Indonesia to more than 30,000.
 Isuzu transfers functions such as development, purchasing, and product planning from Japan to develop a low-priced medium-/light-duty trucks with GVW of 5-10 ton-class, which Isuzu calls "vehicles with QCD for developing countries" that meet the needs in emerging countries. In 2011, the company has already introduced a light-duty truck in Vietnam and a medium-duty truck in Indonesia, also planning to export the product to other countries in Southeast Asia and Middle East. (Note) QCD is an acronym of Quality, Cost, and Delivery.
Hino  In December 2009, the Toyota Group transferred the production of Toyota Dyna and Hino Dutro from Toyota's plant in Indonesia to Hino's plant in Indonesia. Hino's Indonesian plant produced medium-duty and heavy trucks and, by adding light-duty trucks, increased its production volume from 10,000 a year to 35,000, becoming Hino's largest production facility abroad.
 The company will further invest about 10 billion yen, planning to boost production capacity from 35,000 to 50,000 by mid 2012. It will acquire an adjacent site to begin machining of compact engines. With Indonesia as its base, Hino develops and produces "a light truck as a global model that includes the entire needs of the emerging markets from scratch (not by changing the specifications of a Japanese model)," planning to market the model in 100 countries in FY2012.

Source: Isuzu mid-term business plan (2011.11.18)

 



GM: invests USD150 million to produce the People mover starting in 2013

GM: invests USD150 million to produce 40,000 units of the People mover (multi-seat vehicle) per year starting in 2013

 In August 2011, GM announced that it would invest USD150 million in the Bekasi plant in West Java, Indonesia, which had been closed in 2006 to begin production of the People mover (multi-seat vehicle) in 2013. The Bekasi plant plans to produce 40,000 units per year initially. The plant as well as the Rayong plant in Thailand and the Hanoi plant in Vietnam will supply GM vehicles to the markets in Southeast Asia.
 In Indonesia, GM sold 4,508 units in 2010 and 3,080 in the January-August period of 2011.

Source: GM press release 2011.8.12

 



Production volume by OEM: Production volume is 700,000 in 2010 and is also up by 20% in the January-October period of 2011

 In Indonesia, production volume declined to 465,000 in 2009, but increased to 702,000 in 2010. Toyota and Daihatsu produced 383,000, which accounts for 54.5% of the total production.

 In the January-October period of 2011, production volume was 694,000, up by 20.3% year-on-year. GAIKINDO(Association of Indonesia Automotive Industries) says that production by the automotive industry in Indonesia is currently coming close to 1 million a year.

Production volume by OEM (total sales volume)

2005 2006 2007 2008 2009 2010
Toyota 169,178 122,229 172,436 226,001 198,048 265,152
Daihatsu (Note 1) 48,729 33,065 50,369 76,244 77,053 117,969
Toyota Group 217,907 155,294 222,805 302,245 275,101 383,121
Honda 39,597 21,034 29,465 43,672 34,461 53,566
Nissan 10,759 3,376 18,518 30,310 20,019 37,684
Suzuki 103,830 51,878 60,013 98,314 49,747 83,204
Mitsubishi Motors 86,277 41,982 48,161 77,906 53,713 89,158
Mitsubishi Fuso(Note 2)
Isuzu 24,558 15,214 17,534 24,450 14,838 22,811
Hino 7,229 3,231 8,192 14,350 11,635 22,237
UD Trucks 1,926 1,638 1,861 2,250 1,080 2,580
Japanese OEMs Total 492,083 293,647 406,549 593,497 460,594 694,361
Mercedes-Benz 2,229 454 1,305 2,802 2,410 4,133
BMW 1,084 771 10 852 414 837
Hyundai Group 4,646 1,136 3,074 2,923 1,053 2,663
Chery Automobile 0 700 554 345 514
Others (Note 3) 668
Total 500,710 296,008 411,638 600,628 464,816 702,508
Source: GAIKINDO
(Note) 1. "Daihatsu" consists only of Daihatsu vehicles. Toyota vehicles that Daihatsu produces are included in "Toyota".
2. Mitsubishi and Mitsubishi Fuso produce the product at KRM (P.T. Krama Yudha Ratu Motors) and KTB (P.T. Krama Yudha Tiga Berlian Motors) sells the products.
3. "Others" in 2005 consists of Mazda, PSA and GM. PSA withdrew from local assembly in 2005, but is reported to resume assembly of the Peugeot 3008/5008 in the fourth quarter of 2012.

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