This file photo shows minivans and other vehicles entering a ferry in Merak port in Cilegon, Banten on Firday, Jan.1, 2015. (Antara Photo/Asep Fathulrahman) ejumlah mobil pribadi dan bus mengantre memasuki kapal roro di Pelabuhan Merak, Cilegon, Banten, Jumat (31/1). Jumlah penyebrang ke Sumatra melonjak hingga 80 persen menyusu libur panjang akhir pekan. ANTARA FOTO/Asep Fathulrahman/Koz/mes/14.
GM and China's SAIC to Push into Indonesia With No-Frills Vans
BY :NORIHIKO SHIROUZU
FEBRUARY 01, 2015
Beijing. General Motors and Chinese partner SAIC Motor Corp will soon announce a joint push into Indonesia, using their no-frills Wuling brand to establish a beachhead in Southeast Asia's biggest market and from there tackle other markets in the region.
They have already made moves to purchase a property in an industrial district on the outskirts of Jakarta, according to two people familiar with the matter, and are expected to detail within days what GM China chief Matt Tsien called an important joint venture in a country of 240 million people.
The move points to a thaw in what industry watchers considered a creeping chill in the two companies' partnership over recent years.
Wuling's focus is "great functionality, attractive styling and value for money", Tsien said. "That's the basic element that really works here in China, and we believe under SGMW's leadership this will be quite successful in Indonesia as well."
Officials from Indonesia's industry ministry told state news agency Antara late on Friday that GM and SAIC would invest $700 million, with an aim to commence production in 2017 from a factory with capacity for 150,000 vehicles a year.
Stiff competition will come from Toyota and other Japanese brands, which control over 90 percent of the auto market in Indonesia.
"Creating brand awareness for a new entrant, as well as establishing a widespread and effective distribution network in a challenging geographic footprint will also be key success factors," Chao said. "The established players in Indonesia aren't standing still, with Toyota and Daihatsu fiercely defending its dominating share and Nissan and Honda aggressively expanding their product line-up."
The GM-SAIC move has much in common with the strategy of Japan's Nissan, which has revived the Datsun brand it retired in the 1980s to market cars affordable to middle-class consumers in countries such as Indonesia, India, Russia and South Africa. Nissan began selling a Datsun in Indonesia last May starting at 87.9 million rupiah ($6,968).
Daihatsu, a small car specialist affiliated with Toyota, is scrambling to come up with $5,000 cars and is trying to compete in Indonesia with Datsun and Suzuki, which also focuses on no-frills mass-market cars.
"There's plenty of room to play," said Tsien.
Tsien said the new joint venture aims eventually to export out of Indonesia to neighboring markets in Southeast Asia.
The GM-SAIC partnership went global in 2010 when China's biggest carmaker became a 50-percent partner, but SAIC nearly reversed that investment in 2012 by cutting its stake to 9 percent after the joint venture struggled.
"Our relationship is stronger than ever," Tsien told Reuters.
"It's a very ... mutually respectful relationship. We understand each other's interests. We look for opportunities to win together."