Speakers at the Asean Marketing Summit in Jakarta on Thursday (07/09). (Photo courtesy of MarkPlus)

S. Korean Automaker Hopeful About Indonesia's Auto Market


SEPTEMBER 07, 2017

Jakarta. Hyundai Indonesia Motor is hopeful about the country's auto market, as interest in sport utility vehicles is rising and the government is setting higher exhaust emission standards.

"The opportunity for us is that more upcoming global products can actually be utilized in the Indonesian market," Hyundai Indonesia Motor president director Mukiat Sutikno said on Thursday (07/09) in a panel discussion during the Asean Marketing Summit — a marketing event in Jakarta, organized by MarkPlus and Phillip Kotler Center for Asean Marketing.

Mukiat referred to the company's market study that sees a rising demand for sport utility vehicles (SUV) in emerging countries, including Indonesia, replacing the demand for multi-purpose vehicles (MPV).

Indonesia has a "unique market composition" in which MPVs occupy the largest segment, Mukiat said. The demand for MPVs reaches 42.5 percent, followed by commercial cars (19.7 percent), city cars (17.2 percent), SUVs (15.4 percent), other (4.3 percent), and sedans (0.9 percent).

Three out of seven types of Hyundai cars sold in Indonesia are SUVs. Mukiat said Hyundai's upcoming portfolio will feature new SUV models, one of which, Konia, has already been introduced in South Korea.

He also said that the Indonesian government's decision to adopt the Euro 4 emission standard will force stakeholders in the auto and energy industries to comply with it.

According to the standard, the sulfur content of the fuel has to be lower than 50 parts per million (ppm), meaning Indonesia needs to stop consuming RON 88 gasoline — known as Pertamina Premium — by 2018.

Pertamina Retail, the retail arm of state oil company Pertamina, said the sales of RON 88 fuel have been dropping. Currently, 65 percent of consumers are no longer using the low-octane fuel, compared with less than 50 percent last year, Pertamina Retail corporate secretary Ivan Asmara said, as quoted by Kontan.co.id.

"With the population size and motorization demand, the auto industry will continue to grow massively in Indonesia," he said.

According to data from the Indonesian Automotive Association (Gaikindo), automakers sold 85,131 vehicles in July, up from 61,891 units sold during the same period a year earlier.

This year, 618,632 cars were sold so far, up 4.1 percent compared with the same period last year.