Gaurav Gupta, president director of General Motors Indonesia, poses in front of the Chevrolet logo in his office in South Jakarta on Sept. 14. (B1 Photo/Danung Arifin)
General Motors Indonesia Shifts Attention to SUVs
BY :HERU ANDRIYANTO
SEPTEMBER 15, 2016
Jakarta. After discontinuing its short-lived production of small multi-purpose vehicles at a plant in Bekasi, General Motors Indonesia now turns its focus on selling imported sport-utility vehicles for the local market to sustain its business in Indonesia, the company’s boss said in a recent interview.
"We are seeing a lot of growth in the SUV segment in the country and our focus will be to continue to play largely in the SUV portfolio,” GM Indonesia President Director Gaurav Gupta told the Jakarta Globe on Wednesday (14/09).
"We have our small-sized SUV, the Trax, we have the Captiva and we will bring the new Trailblazer very soon, so we have a good range of SUVs for customers to choose from."
While overall car sales in Indonesia plummeted 16.12% to just slightly above 1 million units in 2015 compared to the previous year, the SUV segment showed a robust growth of 15.28% to nearly 132,000 units, according to data from the country's manufacturers’ association, Gaikindo.
"Chevrolet has a rich history in SUV and pickup trucks, not only in the region but also globally. So we would like to play on that platform and build that for a stronger presence in the future," Gupta said.
GM — mainly represented by the Chevrolet brand here — stopped production of its seven-seater MPV Spin last June despite the model having helped the American carmaker achieve an all-time sales record of more than 13,000 units in 2014.
"Yes, the car did help us to sell more cars, but at the same time, given the financial side of the entire program and the details, it would not have been sustainable for a long period," Gupta said, who took the helm at GM Indonesia in July 2015.
With no more manufacturing on the horizon, GM Indonesia has now become solely a sales company, but Gupta said it remains a national-scale business entity.
In fact, transforming GM Indonesia into a national sales company was the main reason behind Gupta's appointment, after 20 years at GM.
The first thing Gupta did to turn the company's fortune around was to move its head office from Bekasi, West Java, to the wealthy business and residential area of Pondok Indah, South Jakarta, in December last year.
Since then Gupta has been rebuilding the carmaker's communication with its Indonesian customers through formal and informal channels beyond advertising, for example through its "Chevrolet Complete Care" program or activities with various Chevy lovers clubs in the country.
Indonesia a unique market
The transition and eventual end of the Spin program hit GM Indonesia hard in the last two years, with average monthly sales declining by a single digit every year, from thousands in 2014 to hundreds in 2015 then to dozens by early 2016.
GM still managed to sell an average of 360 units per month last year, but monthly sales in the first quarter of 2016 were less than 100.
Gupta said its current restructuring program will eventually pay off and remained confident about its sustainability in Indonesia.
"Indonesia is a very large market, the biggest in Southeast Asia. The automotive industry here is still growing," he said.
Having spent years in many other Asian countries before his assignment in Jakarta, Gupta said Indonesia will continue to pose unique challenges compared to Thailand or Vietnam, where he had also worked.
"Each of these markets has got its own unique identity so it’s no use to compare one to the other. Indonesia for example has got a very large domestic market of 1 million plus, Thailand right now is about 750,000 units, so it’s smaller than Indonesia," he said.
Gupta said the profile of the market is sharply different. GM's sales in the Thai market are dominated by pickup trucks, while in Indonesia they largely sell MPVs.
"Indonesia has a unique automotive industry. In most countries you get a much more evenly spread market. You’d have sedans, hatchbacks, SUVs and other types of cars. Indonesia is unique since a large portion of the market is just the MPV segment."
With the new focus on SUVs, GM introduced its popular global model the Trax to Indonesia late last year and brought its latest variant Captiva during the Indonesian motor show GIIAS last month.
"The Chevrolet Trax I is doing really well. It’s now among the top four to five entries in the small SUV segment and still improves every month," Gupta said without citing a figure.
"Indonesians take time to adapt to a new car. But we are gunning for sustainable growth rather than a spike followed a trough, so that's okay."
"We will introduce one more car before the end of this year, and some more entries next year as well."
Gupta said GM Indonesia is also taking a more personal approach in treating their Indonesian customers
"I spent a weekend with the Captiva Chevy Club. To me these clubs are unique to Indonesia and really help us engage with our consumer base, and understand what they need better," he said.
"We will be developing our branding on two key pillars: technology and customer care."
Asked about GM Indonesia's sales target for next year, Gupta said with a smile: "The more the better for us."