Hyundai falls behind other global automakers in Indonesian market

Article by Anita Panait, on February 21, 2013

Hyundai Motor Co. may fail to benefit from the growing demand for cars in Indonesia, after it decided not to build a major plant in the country and as it has been giving a little attention to the needs of one of the key emerging markets for carmakers. Total consumer demand for vehicles in Indonesia is expected to hit 1.25 million this year, and Hyundai’s exclusive distribution partner, PT Hyundai Indonesia Motor, only plans to sell 8,000 cars this year, according to the carmaker’s officials.

Hyundai’s current lineup in the country does not include a small, no-frills multi-purpose vehicle (MPV), thereby making the South Korean carmaker unable to challenge the likes of Toyota Motor Corp's Avanza, two sources privy to PT Hyundai Indonesia's operations told Reuters.

One of the sources remarked that Hyundai needs to understand the true potential of Indonesia, noting that many global brands have been investing heavily in the country in recent years. One of them is General Motors Co, which is expected to commence producing a small affordable car soon.

Some industry officials remarked that Indonesia seems poised to surpass Thailand as Southeast Asia's largest vehicle market by 2016, if not earlier, as sales is expected to reach 2 million cars annually. MPVs currently account for more than 50 percent of the total vehicle demand in Indonesia. The MPV segment is presently dominated by the Avanza, Daihatsu Motor Co's Xenia and Suzuki Motor Corp's Ertiga. GM will soon join the fray with its Chevrolet Spin.

Topics: hyundai, indonesia

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