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Industry & Competitive AnalysisIndustry & Competitive Analysis - Automotive Industry - - Automotive Industry -
Group 4Danny Dharmawan Kosasih
Ratih DamayantiWidyarini Utami
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Presentation Flow
Introduction
Structure – Market structure.– Car Categories– Herfindahl-Hirschman index (HII)– Government Policies & Environment Issues
Conduct– Porter’s Five Forces
Performance– Sales– Profitability
Competitive Strategy– Business Strategy Recommendation
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ASEAN Car Market
• Biggest World Car Makers: Toyota, Mitsubishi, Suzuki, General Motor and Ford have been expanding to Asia region
• They place production bases in ASEAN countries – for efficiency and marketing deeds
• Japanese Car dominates ASEAN market
• New contenders: China and Malaysia
• AFTA sharpened automotive competition in ASEAN – in 2003
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Indonesia: Where are we standing?
• 4 wheelers population in Indonesia per 2005 = 14.471.750* or increased by 325% in the past 10 years
• Indonesia is becoming production centre
• ATPMs in Indonesia now only hold distribution
• While manufacturing trend are operated by foreign car makers: i.e. Toyota and Suzuki
• No clear policy to protect domestic competition
• Next question, where are we heading to?
* Source: Direktorat Samapta Polri/ GIAMM – notes: not included Ranmor ABRI and diplomatic corps - 2005
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Indonesia: 2010 Vision
• Automotive industry is one of accelerator industries to achieve 7% economic growth
– Textile, Shoes & apparels
– Electronics and its components
– Automotive and its components
– Shipping & docks
Source: Visi 2030 & Roadmap 2010 Industri Nasional – KADIN 2007
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Indonesia Economic Indicator Forecast
2006 2007* 2008* 2009* 2010*
GDP growth (%) 5.3 6.0 6.5 6.3 6.2
Inflation (%) 13.2 7.0 4.6 4.0 3.6
Budget Surplus (+) /Deficit (-) -1.1 -0.8 -0.7 -0.4 -0.3
Balance of Payment - % to GDP Growth
0.4 0.4 0.9 0.7 0,5
Interest (%) – Y^Y 11.3 8.5 6.0 5.9 5.7
IDR / USD – Y^Y (Rp) 9,166 9.116 9.310 9.528 9.759
Source: Economist Intelligence Unit. Country Forecast: Indonesia, September 2006
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Market Structure: Monopolistic Competition
• Astra International (AI) & Indomobil Niaga International are two largest automotive companies in the country having affiliation with a number of foreign principals.
• They become agents for the Indonesian market.
Vs
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Market Structure: ATPM Competition
ATPM by groups and brands
Name of company Brands Countries of Origin
Astra Group :
Toyota Astra Motor, PT Toyota Japan
Pantja Motor Isuzu Japan
Astra Nissan Diesel Indonesia, PT Nissan Diesel Japan
Astra Daihatsu Motor, PT Daihatsu Japan
Astra France Motor, PT Peugeot France
Tjahja Sakti Motor, PT BMW Germany
Indomobil Group
Indomobil Suzuki International, PT Suzuki Japan
Central Sole Agency, PT Volvo Sweden
Garuda Mataram Motor Audi, VW Caravelle Germany
Nissan Motor Indonesia, PT Nissan Japan
Indobuana Auto Raya, PT Ssangyong South Korea
Hino Motor Sales Indonesia, PT Hino Japan
Auto Euro Indonesia, PT Renault France
Unicor Prima Motor, PT Chery ChinaSource: Gaikindo – Q1 2007
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• Other companies have been established by self.
Market Structure: ATPM Competition
Name of company Brands Countries of Origin
Krama Yudha Group
Krama Yudha Tiga Berlian Motors Mitsubishi Japan
Imora Group
Honda Prospect Motor, PT Honda JapanOthers
Daimler Chrysler Indonesia, PT Mercedes-Benz,Chrysler, Jeep Germany
General Motors Indonesia, PT Chevrolet United States
Grandauto Dinamika, PT Bentley, Daimler, Jaguar, Roll Royce Britain
Hyundai Indonesia Motor, PT Hyundai South Korea
KIA Mobil Indonesia, PT KIA South Korea
Ford Motor Indonesia, PT Ford United States
Java Motors, PT Land Rover Britain
Starauto Dinamika, PT Daewo South KoreaCar & Cars Indonesia, PT VW GermanyEurokars Chrisdeco Utama, PT Porche GermanyProton Edar Indonesia, PT Proton MalaysiaTC Subaru, PT Subaru JapanMazda Motor Indonesia, PT Mazda JapanSource : Gaikindo – Q1 2007
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Market Structure: Market Domination
• Astra International dominates the total car market in Indonesia
Domestic Car Sales 2007
Domestic Car Sales 2006 -
2007
Source: www.astra.co.id – 18 July 2007
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Business Scheme
• Taken example from Toyota Astra Motor (TAM) which shows manufacturer company with Supplier – Production – Buyer business scheme
TMMIN
TAM
TMMIN
Source: www.astra.co.id – 18 July 2007
TAM
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Categories of Passenger Cars
Sedan CC < 1,5 lt (G/D)
1,5 lt cc < 3,0 lt (G) / 2,5 (D)
Cc > 3,0 lt (G) / 2,5 (D)
MPV 4 x 2 CC < 1,5 lt (G/D)
1,5 lt cc < 2,5 lt (G/D)
2,5 lt < cc < 3,0 lt (G)
Cc > 3,0 lt (G) / 2,5 (D)
SUV 4 x 4 CC < 1,5 lt (G/D)
1,5 lt < cc < 3,0 lt (G) / 2,5 (D)
Cc > 3,0 lt (G) / 2,5 (D)
Categories of Commercial Cars
Bus GVW 5 - 10 ton (G/D)
GVW 10 - 24 ton (G/D)
GVW > 24 ton (G/D)
Pick Up / Truck GVW < 5 ton (G/D)
GVW 5 - 10 ton (G/D)
GVW 10 - 24 ton (G/D)
GVW > 24 ton (G/D)
Double Cabin 4 x 2 / 4 x 4 GVW < 5 ton (G/D)
For all cc
Source: Gaikindo – Q1 2007
•Passengers cars consist of 3 types: sedan, MPV 4X2 & SUV 4X4 each with different types in engine capacity
•Commercial cars consist of 3 types: bus, pick up/truck, double cabin 4X2/4X4 each with different weight (gross vehicle weight)
Car Categorization
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Production Capacity
• Toyota Motor Manufacturing Indonesia (TMMIN) has the largest production capacity among car assembling companies in the country with a total capacity of 170,000 units a year
• Indomobil is the second largest in capacity of production 120,000 units a year
Car assembling companies and production capacity
Name of assembling Company Year ofEstblsh
Status Brand Prod. Cap.(unit/year)
Toyota Astra Motor, PT 1971 PMA Toyota 170,000
Indomobil Suzuki International, PT 1976 PMA Suzuki 120,000
Source: Gaikindo – Q1 2007
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Name of assembling Company Year ofEstblsh
Status Brand Prod. Cap.(unit/year)
Astra Daihatsu Motor, PT 1978 PMA Daihatsu 105,000
Astra Nissan Diesel Ind, PT 1984 PMA Nissan Diesel (Truck) 6,500
Daimler Chrysler Indonesia, Mercedes Benz,
PT (Mercedes Benz Ind, PT) 1970 PMA Chrysler, Dodge, Jeep 8,000
Gaya Motor, PT 1969 PMDN BMW, Isuzu, Peugeot, Daihatsu, Nissan, Diesel
60,000
General Motor Indonesia, PT 1993 PMA Chevrolet 30,400
Indomobil Suzuki International, PT 1976 PMA Suzuki 120,000
Hino Indonesia Manufacturing, PT 1982 PMA Hino 10,000
Honda Prospect Motor, PT 1976 PMA Honda 42,000
Nissan Motor Indonesia, PT 1995 PMA Audi, VW, Ssangyong, Volvo, Nissan
12,000
Krama Yudha Ratu Motors,PT 1975 PMDN Mitsubishi Colt 120SS, Colt L300, Colt Diesel FE, Fuso
100,000
National Assemblers, PT 1971 PMDN Suzuki, Mazda, KIA 21,000
Trijaya Union, PT 1986 PMDN Mitsubishi Bus 1,440
Toyota Astra Motor, PT 1971 PMA Toyota 170,000
Pantja Motor, PT 1974 PMA Isuzu 51,000
Source: Gaikindo – Q1 2007
Assembling Companies & Capacity
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Largest Brands Sales in Indonesia 2005-2006
Ranks Year 2005 Year 2006
Brand/model Units % Brand/model Units %
1 Toyota Kijang 93,114 17,4 Toyota Avanza 52,260 16,4
2 Toyota Avanza 54,893 10,3 Toyota Kijang 46,565 14,6
3 Suzuki Carry/ Futura 47,896 9,9 Daihatsu Xenia 23,555 7,4
4 Mitsubishi Colt
Diesel FE
35,470 6,6 Suzuki Carry/ Futura 23,301 7,3
5 Honda Jazz 32,241 6,0 Mitsubishi Colt
Diesel FE
21,740 6,8
6 Suzuki APV 27,882 5,2 Honda Jazz 18,581 5,8
7 Daihatsu Xenia 27,505 5,2 Toyota Dyna 13,479 4,2
8 Mitsubishi T-120 SS 22,187 4,2 Suzuki APV 12,283 3,9
9 Mitsubishi L 300 19,431 3,6 Isuzu Panther 11,615 3,6
10 Isuzu Panther 18,846 3,5 Mitsubishi L 300 10,722 3,4
Sub total 379,465
71,1 Sub total 234,101 73,4
Total Domestic sales 533,917
100 Total Domestic Sales 318,904 100Source: Gaikindo – 2007
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Market Concentration: Herfindahl-Hirschman Index (HII)
• Herfindahl-Hirschman index (HII) equals the sum of the squared market shares of all the firms in the market. HHI =Σi (Si)2.
• Indonesian Automotive Industry HHI = 0.220.22 (low concentration market)
Honda, 9.4
Suzuki, 14
others, 7.1
Toyota, 38.8
Daihatsu, 10.4
Mitsubishi, 14.7
Peugeot & Nissan Diesel,
0.4
Isuzu, 5.2 %
Market
Share 2006 (%)
(Si)^2
Toyota 38.8 0.15
Mitsubishi 14.7 0.02
Suzuki 14.0 0.02
Daihatsu 10.4 0.01
Honda 9.4 0.01
others 7.1 0.01
Isuzu 5.2 0.00
Peugeot & Nissan Diesel
0.4 0.00
Total 100 0.22 Source: Gaikindo – 2007
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Government Policy
• Auto industry in Indonesia began to expand the operatioin of brand holding sole agent (ATPM) through the decision of Industry Minister No.295/1982 and No.428/1987
• The regulation measure of 1999 constituted a fundamental change in the country automotive policy, allowing imports of cars in the form of CBU cause change in market competition and competition became sharper after that year. Thus the import duties were reduced to 25%-50% on CKD and 40%-80% on CBU cars.
– Provided import duty facility to PT Astra Daihatsu Motor with a decision of the finance minister No. 195/KMK.10/2006 on 11 April 2006.
– Same facility was given to PT Proton Edar Indonesia base on a decision of the finance minister No. 530/MK.10/2005 to import 1,300 units of CBU car.
• The reduction of the import duties is also in line with the AFTA Scheme, which was first implemented in 2003.
• On October 2005, government raised the sales taxes on luxurious goods. Later, however, the government regulation PP No.41/2005 was cancelled on public protest especially by auto industrialists.
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Luxury sales tax (PPnBM) effective after the revocation of PP No. 41
Category Engine Capacity PPnBM
2003 (effective) 2005 (cancelled) Increase
Passenger Car
Sedan CC < 1,5 lt 30% 30% 0%
1,5 lt < CC <3,0 lt 40% 50% 10%
CC < 3.0 lt 75% 75% 0%
MPV (4X2) CC < 1,5 lt 10% 10% 0%
1,5 lt < CC = 2,5 lt 20% 25% 5%
2,5 lt < CC = 3,0 lt 40% 50% 10%
CC > 3,0 lt 75% 75% 0%
SUV (4X4) CC < 1,5 lt 30% 30% 0%
1,5 lt < CC = 3,0 lt 40% 50% 10%
CC > 3,0 lt 75% 75% 0%
Commercial Car
Double Cabin 4X2/4X4
GVW < 5 ton
Double Cabin, All CC
20% 25% 5%
Source: Gaikindo – Q1 2007
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The Environmental Issues
• The emission standard of Euro 2 is a standard used to reduce waste gas emission of motor vehicles efective all over the world
• In Indonesia the Euro 2 standard is legalized a decision of the state minister of the environment No. 141/2003 but its implementation was delayed as automotive industry was not immediately ready to implement it. However, almost all over automotive factories agred to comply with the regulation to adopt the Euro 2 standard.
• The regulation became effective on January 2007 for new motor vehicles
• TAM has started with Vios & Limo cars. Suzuki products using the standard including Carry, Karimun, Katana , APV with Catalytic Converter (CC). Daihatsu will upgrade Zebra by adopting the Electronic Fuel Injector (EFI) and addition of CC. Honda have been produced with the engine technology friendly with the environment, even Jazz, CR-V, Accord and Odyssey already meet the standard of Euro 4.
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Automotive Industry in Porter’s Five Forces
Competition among Rivalry
Buyers(Buyer Power)
Suppliers(Suppliers
Power)
Threat of New Entrant
Substitutes
Source: Michael E. Porter - Competitive Strategy
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SUPPLIER POWER
•Supplier concentration•Importance of volume to supplier•Differentiation of inputs•Impact of inputs on cost or differentiation•Switching costs of supliers and firms in industry•Presence of substitute inputs•Threat of forward integration relative to threat of backward integration by firms in industry•Cost relative to total purchases in industry
THE DEGREE OF RIVALRY
•Concentration and balance•Fixed (or storage) costs/value added•Intermittent overcapacity•Industry growth•Product differences•Brand identity•Switching costs ->•Informational complexity•Diversity of competitors•Corporate stakes•Exit barriers
THE THREAT OF ENTRY(Entry Barriers)
•Absolute cost advantages•Proprietary learning curve•Access to necessary inputs•Proprietary low-cost product design•Government policy•Economies of scale•Capital requirements•Proprietary product differences•Brand identity•Switching costs•Access to distribution•Expected retaliation
•Bargaining leverage•Buyer concentration vs. firm concentration•Buyer volume•Buyer information•Buyer switching costs relative to firm switching costs•Pull-through•Substitute products•Ability to backward integrate
•Price sensitivity•Price/total purchases •Impact on quality/ performance•Product differences •Brand identity•Buyer profits•Decision makers’• incentives
BUYER POWER
THE THREAT OF SUBSTITUTES
•Relative price performance of substitutes•Switching costs•Buyer propensity to substitute
ELEMENTS OF INDUSTRY STRUCTURE – PORTER’S FIVE FORCES
Industry Competitors
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Rivalry among the competition:Car maker companies
Name of companies
Total Assets
(Rp)
Shareholders and share
split before restructuring
Shareholders and sharesplit after restructuring
PT.Toyota Astra Motor 4,065 bio Toyota Motor Corp. 49 /oAstra International 51%
Toyota Motor Manufacturing Indonesia(TMMIN) - (manufacturing) - Toyota Motor Corp. 95% - Astra International 5%Toyota Astra Motor (TAM) - (distribution) - Toyota Motor Corp. 49% - Astra International 51%
PT. Astra DaihatsuMotor
2,174 bio Daihatsu Motor Corp. 40%Nichimen Corp. 10%Astra Int'l 50%
Daihatsu Motor Corp 61.75% Toyota Tsusho Corp. 6.38% Astra International 31.87%
PT. Indomobil Suzuki n/a Suzuki Motor Corp 40%Indomobil Sukses Int'l 51%
Suzuki Motor Corp. 90%Indomobil Sukses Int'l 10%
PT. Hino IndonesiaManufacturing
557 bio Hino Manufacturing 60%Indomobil Sukses 20%Sumitomo Corp. 10%
Hino Manufacturing 90%Indomobil Sukses Int'l 10%-
PT. Tjahja Sakti Motor n/a BMW AG 50%Astra International 50%
PT. Tjahja Sakti Motor (manufacturing) - Astra International 100%PT BMW Indonesia (Sales / Distribution) - BMW AG 100%
PT. Honda ProspectMotor
1,602 bio Honda Motor Co. Ltd 49%Honda Prospect Motor 51 %
Honda Motor Co. Ltd 51%Honda Prospect Motor 49%
Source: Gaikindo – 2007
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Rivalry among the competition:New Brand/Model (1)
Month
New products
Year 2004 Year 2005 Year 2006
January Toyota Avanza Toyota Kijang Innova Toyota Yaris
Daihatsu Xenia Honda Odyssey
Mazda RX 8 Honda New CRV
February Suzuki Every Mitsubishi Grandis
Honda Jazz Nissan TiiDa
Nissan Murano
March KIA Sorento Daihatsu Taruna OXXY
Audi A8 Mercedes CLS 350
Mercedes CLS 500
Peugeot 407
April Toyota Limo KIA Carens SE Plus
KIA Picanto KIA Big Up
Chevrolet Zafira
May BMW 760 Li Mercy A-150
June Toyota Camry Hyundai New Atoz Toyota Hi Lux
Suzuki Carabian BMW 120i
Honda New City BMW 320i
BMW X3 BMW 620i
BMW 740i
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Month
New products
Year 2004 Year 2005 Year 2006
July Nissan New Cedric Toyota Fortuner Suzuki Grand Vitara
Chevrolet Aveo Hyundai Tucson Hyundai Azera
Renault Megane Nissan X-Trail STT
August Suzuki APV Mitsubishi Maven Toyota Avanza VVTi
Daihatsu New Zebra BMW 523 Daihatsu Xenia VVTi
Daihatsu New Taruna BMW 750 Li Chevrolet Kalos
Nissan New Serena Peugeot 407 2,9 Nissan Latio
Chevrolet Spark Mercedes R350L
VW New Caravelle
September Toyota Kijang Innova Suzuki Swift Chery QQ
Nissan Teana Ford Focus
Ford Ranger DC KIA Pride
October VW Touareg Mercedes C230
Mercedes C280
Mercedes E280
Mercedes B170
Rivalry among the competition:New Brand/Model (2)
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Month
New products
Year 2004 Year 2005 Year 2006
November Mitsubishi L200 BMW M5
Mitsubishi T120ss 1,5
Mercedes C240 Wgn
Mercedes SL 350
December Nissan Murano BMW 735i Toyota Rush
Chevrolet Estate Toyota Dyna 110, 130
Hino Dutro
Lexus LS 460
Peugeot 607
Mazda 6
Rivalry among the competition:New Brand/Model (3)
Effect of new types on sales
• The appearance of new types of cars has its effects on sales on the domestic market, but effects are not always significant in increasing sales.
• In 2004, there were a number of new models and some of them succeeded to become market leader until 2006 such as Toyota Avanza, Daihatsu Xenia, Honda jazz, Toyota Innova and Suzuki APV.
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Entry Barriers
Absolute cost advantages
Proprietary learning curve X
Access to necessary inputs X
Proprietary low-cost product design X
Government policy X
Economies of scale X
Capital requirements
Proprietary product differences
Brand identity
Switching costs
Access to distribution
Expected retaliation
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Suppliers
Components name # of suppliers
Dies, Jig & Stamping 6
Frame/ Chasis 2
Axle 3
Shock Absorber 3
Leaf & coil spring 3
Brake system 12
AC, Compressor, Evaporator 2
Safety belt 2
Engine Part/ Assembly 14
Clutch & Clutch Facing 3
Filters 8
Gasket 5
Exhaust Pipe & Muffler 4
Body/ Press part & component 14
Rubber parts 8
Wheel Rim / Alloy 6
Components name # of suppliers
Speedometer 1
Spark plug 3
Radiator 4
Transmission 2
Wiring harness 4
Electrical component 9
Sit & interior component 6
Plastic parts / accessories 11
Steering system 5
Safety glass 2
Battery 6
Others 8
Source: GIAMM/ Gaikindo 2007
• Astra Group owns 28 supplier companies Vs Indomobil 18 companies
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Buyers (1) : Sole Distributor
Brands Principals ATPM Sole distributors Number of Dealers
Suzuki Suzuki Motor Corporation
PT Indomobil Suzuki International
PT Indomobil Niaga International
202
Isuzu Isuzu Motor Ltd PT Pantja Motor PT Astra Intl. - Isuzu Sales Operation
98
BMW BMW AG PT Tjahja Sakti Motor
PT BMW Indonesia 23
Mercedes Daimler Chrysler PT Daimler Chrysler Indonesia
PT Daimler Chrysler Distribution Indonesia
22
Hino Hino Motor Ltd PT Hino Motor Manufacturing Indonesia
PT Hino Motor Sales Indonesia
30
Peugeot Peugeot Motor Co.
PT Astra France Motor
PT Astra International Peugeot Sales Operation
25
Daihatsu Daihatsu Motor Co.
PT Astra Daihatsu Motor
PT Astra International Daihatsu Sales Operation
124
Source: Gaikindo – 2007
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Buyers (2) : Main Dealers
Brands Principals ATPM Main Dealers Number of
Dealers
Toyota Toyota Motor Corporation
Toyota Astra Motor
Auto 2000PT. New Ratna MotorPT. Hadji Kalla Trading CompanyPT. Hasrat AbadiPT. Agung Automall
142
Honda Honda Motor Co. Ltd
PT. Honda Prospect Motor
Honda Jakarta CentreHonda Bandung CentreHonda Semarang CentreHonda Surabaya CentreHonda Cikarang Centre
54
Source: Gaikindo – 2007
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Buyers (3) : Official & Independent Dealers
Brands Principals ATPM Number of
Dealers
Mitsubishi Mitsubishi Motor Company
PT. KTB 140
Hyundai Hyundai Motor Company
PT. Hyundai Indonesia Motor
36
KIA KIA Motor Corporation
PT. KIA Mobil Indonesia
77
Ford Ford Motor Company
PT. Ford Motor Indonesia
6
Chevrolet General Motor Corporation
PT. General Motor Indonesia
46
Source: Gaikindo – 2007
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Buyers : Customer Purchasing Power
Brands Price around Competition Intensity
Low +/- Rp. 100 million Lead in Market Share
Middle Rp. 150 – 200 million Sharp in competition
High > Rp. 200 million Brisk with many playersSource: Gaikindo – 2007
Buyers : Financing Companies
Year Volume of Sales (unit) Price(Rp million/unit)
Total Value Financing Value (Rp.
Billion)
2002 317,748 150 47,662 21,448
2003 354,629 155 54,967 28,858
2004 483,148 160 77,304 46,382
2005 533,917 165 88,096 52,858
2006 318,904 170 54,214 32,528
Source: Gaikindo – 2007
• +/- 32 Car Financing companies – not including Banks
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Substitute
• 2 Wheelers – population in 2005 = 33.193.076*
• Mass / Public Transportation
* Source: Direktorat Samapta Polri/ GIAMM – notes: not included Ranmor, ABRI and diplomatic corps - 2005
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Summary
Industry Attractiveness High
Force Threat to profits
Internal rivalry High
Entry Low to Medium
Substitutes/Complements Medium to High
Supplier power Medium
Buyer power Low
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Car Sales - Domestic Market, 1999-2006
24,374
72,219
98,698115,997
128,561
170,283 169,598
96,517
69,439
228,746
200,901 201,771226,068
312,865
364,319
222,387
93,813
300,965 299,599317,748
354,629
483,148
533,917
318,904
0
100,000
200,000
300,000
400,000
500,000
600,000
1999 2000 2001 2002 2003 2004 2005 2006
Commercial cars
Passenger cars
Total
469% Increase in the 1999-2005 period In 2000, sales surged to 300,965 units from only 98,813 units in 1999, due to deregulation in
importing duties After 2001, sales grew steadily until peaking at 533,917 units in 2005. In 2006, sales dropped to 318,904 units as a result of drastic hikes in the oil fuel price late 2005.
The fuel price hike weakened the buying power of the people. •
469%
Source: Gaikindo – Q1 2007
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Car Sales By Categories 2006
• Sales on the domestic market in 2005 and 2006 were dominated by MPV and SUV, with sales totaling 328,272 units in 2005 and 203,342 units in 2006.
• The market share of MPV and SUV rose because of sharper fall in the sales of other types of cars.
MPV - SUV, 64.1
Pick Up, 18
Truck, 12.8Sedan, 5.6
%
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Car Sales By Categories 2005 - 2006
Year Category of pass. Cars Category of comm. CarsTotal
Sedan MPV-SUV Pick Up Truck
2005 35,513 328,272 103,731 66,401 533,917
2006 17,903 203,342 56,921 40,738 318,904
Source : Gaikindo Q1 2007
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Sales in 2007 Increasing
30,477
11,67311,36411,041
8,746
4,078
1,458 1,402 982 709
34,476
10,7728,996 8,500
7,551
3,945
1,168 881 743 696
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
To
yo
ta
Mit
su
bis
hi
Ho
nd
a
Su
zuk
i
Da
iha
tsu
Isu
zu
Hin
o
Fo
rd
KIA
Hy
un
da
i
To
yo
ta
Su
zuk
i
Da
iha
tsu
Mit
su
bis
hi
Ho
nd
a
Isu
zu
Hin
o
Nis
sa
n
Fo
rd
KIA
Q1 2006 Q1 2007
Source: Gaikindo – 2007
(44)
Profitability
2007 – Q1 2006 2005 2004 2003
Honda
ROA 0.05 0.06 0.05 0.06 0.06
ROE 0.13 0.14 0.15 0.16 0.16
Toyota
ROA 0.05 0.05 0.05 0.05 0.04
ROE 0.14 0.13 0.13 0.14 0.11
Sources: Financial Statement each company
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Business Strength Matrix
• Strategic Options for Toyota : Grow, Seek Dominance, Maximize, Investment*
Source: Business Growth Strategies For Asia Pacific
Rel
ativ
e C
om
pet
itiv
e S
tren
gth
Industry Attractiveness
HiLo
Hi
Med
Med
(47)
Capacity Per Year / Sales 2006
182,767
48,762
25,010
53,750
89,158 87,274
170,000
105,000
51,000
42,000
101,440
120,000
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
180,000
200,000
Toyota Daihatsu Isuzu Honda Mitsubishi Suzuki
sales production capacity
• Toyota sales overlapping its production capacity – this shortage is fulfilled by Daihatsu production which also made Toyota Avanza and Toyota Rush
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Business Strategy Recommendation
• Maintain & launching new type model – MPV– SUV
• Acquire consumer purchasing power segment– Around Rp. 100 – 150 million
• Innovate fuel efficient car• Maintain increase Brand Image• Strategic alliance with Insurance and Financing
companies• Increase amount of Dealer & improve After Sales
Service