Toyota remains optimistic despite 1996 fall<\/p>\n
By Russell Williamson<\/p>\n
THE year 1996 may well go down on record as Toyota-Astra
\nMotor's annus horribilus.<\/p>\n
While the volatile nature of the whole automotive sector this
\nyear has taken its toll on sales -- which are likely to fall
\nshort of expectations by more than 50,000 cars and reach only
\n320,000 for the year -- Indonesia's biggest carmaker has probably
\ntaken the hardest fall.<\/p>\n
On paper, at least, the statistics paint a fairly bleak
\npicture.<\/p>\n
Toyota's market share has dropped to a point where Mitsubishi
\nmay take the leadership title from Toyota -- an honor it has held
\nfor the past 11 years.<\/p>\n
Sales of the Kijang -- a model which makes up 80 percent of
\nToyota's total volume -- fell by about 24 percent to the end of
\nOctober compared with the same period last year.<\/p>\n
Toyota passenger car sales -- of which Corolla makes up about
\n65 percent to 70 percent -- fell by 30 percent over the same
\nperiod against an industry average fall of only between 5 percent
\nand 6 percent.<\/p>\n
Overall retail sales for Toyota, combining vehicles of all
\ncategories, fell between 15 percent and 17 percent over 1995.<\/p>\n
The statistics keep coming and the picture does not get any
\nbrighter.<\/p>\n
However, while the company may be down, it is by no means out,
\nand intends to fight to regain its position as Indonesia's
\npremier carmaker.<\/p>\n
The marketing director for Toyota-Astra, Nobuharu Tabata, said
\nthe whole industry was entering a period of transition and all
\nmanufacturers would need to work hard to survive and prosper over
\nthe next few years as government policy and consumer preferences
\nwere molded to meet the needs of the future.<\/p>\n
For Toyota, Tabata said this meant putting the year behind it
\nand focussing on the prospects for next year with a renewed
\nvigor.<\/p>\n
The cornerstone of this strategy to revitalize Toyota's
\nfortunes lie squarely with the new model Kijang, which will be
\nlaunched sometime next month.<\/p>\n
With a wider model range and the most substantial change to
\nthe vehicle since 1987, including the addition of a diesel
\nengined version, Tabata said he expected the company to be able
\nto win back much of its lost sales from this year.<\/p>\n
Indeed, he said one of the reasons for the drop in Kijang
\nsales this year were the widespread rumors of the impending
\narrival of the new model causing customers put their purchase
\ndecisions on hold.<\/p>\n
Tabata said the floods in Jakarta in February also severely
\naffected sales for about three months because not only did
\nproduction cease for two weeks, but also many small business
\ncustomers were hit badly by the floods and delayed or canceled
\nKijang purchases.<\/p>\n
He said a tightening of the finance sector's lending policies
\nand a relatively high interest rate of about 22 percent had also
\nhad a detrimental effect on sales.<\/p>\n
\"There is a high interest rate and finance companies have been
\ncontrolling their credit since the end of last year and because
\nof that sometimes the marginal customers cannot get a loan from a
\nfinance company,\" Tabata said.<\/p>\n
However, while he acknowledged that the announcement of the
\narrival of a new cheap sedan in the form of the Timor car in
\nFebruary had slowed sales, since the car's actual delivery debut
\nin October and the customers' response to it, he was confident
\nthat there was still very much a market for multipurpose family
\nvehicles like the Kijang.<\/p>\n
Tabata said that while some commentators in the industry
\npointed to countries like Thailand and Malaysia as indicators of
\nthe increasing preference of consumers for passenger sedans,
\nIndonesia was a very different country with its own particular
\nvehicle needs.<\/p>\n
\"There will be a slight decrease on reliance on Kijang but
\nthere still remains a substantial market for the minibus,\" Tabata
\nsaid.<\/p>\n
\"For example, in the rainy season there are floods and the
\nhigher ground clearance of the vehicle type is a benefit because
\nof the bad roads,\" he said.<\/p>\n
He said although the infrastructure was improving, it was not
\ngoing to change overnight and there would always be a need for
\nvehicles like Kijangs outside of the big cities.<\/p>\n
He also said the larger size of Indonesian families --
\nrequiring vehicles to carry more than five passengers -- and the
\nrelative ease to maintain the mechanical nature of the Kijang
\nmeant the vehicle was likely to remain on consumers shopping
\nlists for some time to come.<\/p>\n
Although the new Kijang may provide a degree of optimism for
\nToyota's prospects for next year, the chances of the company
\nseeing any significant improvement in its passenger-sedan sales
\nbefore at least 1998 remain slim.<\/p>\n
Tabata said what the company needed was a car to compete in
\nthe sub-Rp 50 million market to cater for the growing middle
\nincome earners in the cities.<\/p>\n
\"Corolla is more than Rp 70 million, so the average customer
\ncannot afford it but once we can provide customers with such a
\ncar at less than Rp 50 million we can expect a substantial
\nincrease,\" Tabata said.<\/p>\n
He pointed to the success of the Suzuki Baleno, Bimantara
\nCakra and Honda City as evidence of this as all these cars had
\neaten into Corolla sales to some degree.<\/p>\n
\"Such models have effected Corolla sales and they have dropped
\nto around 400 per month while we were selling between 600 and 700
\nlast year,\" he said.<\/p>\n
However, he said, when Toyota launched the affordable family
\ncar (AFC) in 1998, it would be able to regain some market share
\nin this growing market segment.<\/p>\n
The AFC is a 1500cc small four-door sedan which has already
\ngone on sale in Thailand and is tailored to meet the needs of the
\nurban class.<\/p>\n
He said once that vehicle was available in Indonesia, Toyota
\ncould expect to regain its market leadership as it would have a
\nproduct lineup to cater for all the needs of local consumers.<\/p>\n
\"One of our strongest points is that we will be able to offer
\nboth types of vehicles for the Indonesian market,\" he said.<\/p>\n
And in a market that he still expects to reach 500,000 cars a
\nyear by 2000, that should augur well for the survival and indeed,
\nprosperity, of Toyota.<\/p>",
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