United States (US) car producer, General Motors (GM) announced its plans to exit from Indonesian market by the end of March 2020, said the company on Monday (10/28) - Photo by the Company

JAKARTA (TheInsiderStories) – United States (US) car producer, General Motors (GM) announced its plans to exit from Indonesian market by the end of March 2020, said the company on Monday (10/28). But the manufacturer assured will continue to support its existing customers with warranty and after sales service

In official statement, GM Southeast Asia’ president Hector Villarreal, revealed the decision followed a comprehensive review of potential future business plans for GM Indonesia.

“This difficult decision is consistent with GM’ global strategy to focus on markets where there is a clear pathway to sustainable profitability. In Indonesia, we lack the scale and domestic manufacturing footprint to sustainably compete in the volume segments of the market,” said the president.

These factors, he continued, have also made GM operations more exposed to broader factors in Indonesia, like softening commodity prices and foreign currency pressures. Recently, GM financial performance was being hit by a major strike of more than 50,000 workers and have potentially cost nearly US$100 million in revenue per day.

Primarily, the company generates its revenue from its North America segment which is projected to account for 75.2 percent of total revenues in 2019. The international segment is expected to be the second highest contributor to the GM’ sales at 13.4 percent.

The Association of Indonesia Automotive Industries (GAIKINDO) has reported, during 2018 the competition between the top five brands gave dynamics and flairs to the automotive industry. The exchange of the best-selling brand ranks is intense.

Last year, PT Toyota Astra-Motor as the holder of the Toyota brand targets to keep up with a minimum market share at the level of 31 percent of total national sales. Unit of Toyota Motor Corp., and PT Astra International Tbk (IDX: ASII), shows a fairly aggressive move at the beginning of the year by introducing two new models to regain Toyota’ domestic sales.

While, its sister company, PT Astra Daihatsu Mobil been able to maintain the second position as the best-selling brand in the country. GAIKINDO noted, in 2018 Daihatsu gained 17.6 percent, up slightly from 17.3 percent in 2017. Sales of Daihatsu seemed stable with the largest sales contribution coming from the low cost green car (LCGC) model.

Then, Honda became one of the brands whose market share was eroded in 2018. The association recorded that by the end of last year, Honda saw a share of 14.1 percent, thanks to sales of 162,170 units. In 2017, the manufacturer won a 17.3 percent share of the national automotive market share.

Other Japanese car maker, Mitsubishi Motors was almost able to double the market share. The company closed 2018 with a 12.4 percent share of the market from 2017 was only 7.4 percent. And PT Suzuki Indomobil Sales targets to reach 11.1 percent market share in 2019. That number is higher than the 2018 sales of 10.25 percent for wholesales.

“We target a market share calculation, from 10.25 percent to 11.1 percent, “said Setiawan Surya, 4-Wheel deputy managing director of Suzuki.

Throughout 2018, Suzuki’ total sales were 118,014 units for wholesales, up 5.7 percent compared to 2017. For retail sales, Suzuki was able to sell 116,668 units, up 8.9 percent compared to 2017 sales.

The tight competition with Japanese and China manufacturer has hit some manufactures in Indonesia, one of them GM. Recently, the Association of Indonesia Automotive Industries (GAIKINDO) projects the car market to grow moderately in this year.

Car sales are predicted to be not much different from that in 2018 of 1.1 million units. Astra its expecting still lead the market.

by Linda Silaen, Email: linda.silaen@theinsiderstories.com