GM Is Putting Its Money on Indonesia
All eyes in the automotive industry are on China and the massive growth potential that the world’s most populous nation offers, but General Motors (NYSE:GM) is finding that Indonesia may actually prove to be equally lucrative. Though GM has been in Indonesia for 30 years longer than Toyota (NYSE:TM), the Japanese firm still retains a firm grip on the market, relegating General Motors to a small portion of the country’s auto sales.
However, GM is counting on the world’s next automotive boom to happen in Indonesia, and it will be waiting with open arms. Michael Dunne, who became president of the company’s Indonesian operations in September, says that General Motors is banking on multipurpose vehicles, sport utility vehicles, and compact cars to narrow the gap with its Japanese rivals.
“The most exciting thing about Indonesia is it reminds me of China about a dozen years ago, early 2000s,” Dunne told Reuters in an interview on Tuesday. ”Population times per capita income equals opportunity for automakers. So when you have a massive population and you have that income threshold crossing $3,500, in country after country, without exception, that’s been a trigger of take-off.”