Automakers rev up to win lucrative MPV, SUV markets
Automakers rev up to win lucrative MPV, SUV markets
Agus W. Soehadi, Contributor, Jakarta
Spurred by the relative stability and slight improvements in the country's economy during 2003, the automotive industry recorded a positive response.
Data at the Association of Indonesian Automotive Manufacturers (Gaikindo) shows that total car sales increased by 11 percent to 354,331 units in 2003 from 317,749 units in 2002.
Gaikindo chairman Bambang said multipurpose vehicles (MPVs) and small sedans comprised 75 percent of sales, while sales of sport utility vehicles (SUVs) also increased slightly. He believes these categories will enjoy higher sales this year.
The great consumer interest in MPVs and SUVs comes from the products' greater value-for-money compared to other types of cars. To put it simply, Bambang said, consumers feel that MPVs and SUVs offer much more for their prices, which are in an affordable range.
The Toyota Avanza, for example, which goes for under Rp 100 million (US$ 11,000), offers a spacious and luxurious interior as well as good gas mileage. Supported by Toyota's reputation and nationwide after-sales services, Avanza is considered the best MPV locally, and demand is so high that customers must order in advance -- but they do not seem to mind waiting a few months for their new car.
The various features and plus points of a car type attract customers of different market segments.
For those who travel a lot, for example, a comfortable interior and a powerful, reliable engine are a must.
Prudent, economical customers, on the other hand, put good gas mileage, good resale value and low maintenance costs on their list of priorities.
To borrow from J. Paul Peter and Jerry Olson's best-seller Consumer Behavior and Marketing Strategy, the needs of consumers can be divided into three basic categories: utilitarian, symbolic and hedonistic.
The utilitarian consumer, as the word implies, tend to opt directly for MPVs with a large passenger capacity, particularly if they have a large family. Toyota Kijang, Isuzu Panther, Hyundai Trajet and KIA Carnival would be the appropriate vehicles for such a customer.
For those who drive solo or with one or two friends at the most, then a city car or a small sedan would suffice.
Consumer behavior, however, is not cut and dry, and sometimes a purchase is based not on a product's functionality or tangible features, but more on the abstract personality and intangible plus points inherent to the brand. This is the symbolic type of consumer.
BMW customers, for example, perceive this particular make to have much more than excellent performance and luxury features -- it reflects an achievement and prestige, and exudes an aura of success.
The symbolic perception of cars can also work in reverse. Observe, for example, the sad fate handed down to brands used as taxis: The brand immediately loses its prestige. The Toyota Soluna suffered a decline in its image when local taxi companies chose it to outfit their fleets, and this was evident in a drastic decrease in sales to individuals. Its succeeding model, the Vios, almost experienced a similar fate. Catching on to local consumer behavior, Toyota has now prepared a model version specifically for taxis: the Limo.
It is curious to note, however, that in Europe, car models used as taxis are considered tough and reliable.
The hedonistic consumer, meanwhile, goes for the sensory aspect, that is, they seek the highest pleasure from their purchases. They often purchase products, including cars, for extreme personal satisfaction, for fun or just to show off. Catering to this segment is the hardest for marketers.
To a certain extent, especially for the macho car owner, SUVs have succeeded in matching hedonistic consumers' requirements. A smart combination of sedan and jeep with all the comfort and dependability of both, SUVs are a formidable partner to those who seek adventure and challenges.
Given the current high sales and promising future for MPVs and SUVs, it is only natural that more manufacturers are competing in this segment.
In the smaller MPV category, the Hyundai Matrix, KIA Carens, Suzuki Aerio, Mazda Premacy and Chevrolet Zafira are fighting it out. In the larger MPVs, aside from the dominant Toyota Kijang, quite a number of major automakers are also competing for a slice of the market: KIA Carnival, Hyundai Trajet, Mazda MPV, Toyota Previa and Honda Odyssey.
On the SUV frontline, the battle to win customers is not less fierce. Nissan Terrano, Ford Ranger and Chevrolet Blazer are competing in the heavy-duty segment, while Suzuki Escudo, Nissan X-Trail, Honda CR-V, Mazda Tribute, Ford Escape, KIA Sportage, Land Rover Freelander and Hyundai Santa Fe are vying for a cut in the light-duty SUV market.
The question for car marketers is obviously how to win more customers in view of the growing competition. Apparently, a total solution must be provided to customers -- meaning that a car should meet most of their requirements, or as many as possible at least.
It should offer luxury to a certain degree, combined with comfort, a powerful engine, good gas mileage and other features that make for a convenient ride.
Honda Jazz is one unique example in the attempt to combine many selling points.
Certainly not a gas-guzzler, Jazz enjoys a high resale value and comes with an excellent after-sales service that spans the country, as well as an established name. It has a luxury interior within a sporty and trendy exterior, while it boasts a Steermatic transmission using the Continuously Variable Transmission (CVT) technology, which provides high-tech driveability ala Formula 1. With the Steermatic, drivers can shift gears with their fingertips -- on the steering wheel.
It is a car that tries to cater to all consumers: the utilitarian, symbolic and hedonistic rolled into one.
The writer is chairman of the school of marketing at Prasetya Mulya Business School.