Can a New Minivan Boost GM in This Foreign Market?

General Motors

General Motors Co. (NYSE:GM) has not done much to challenge Toyota Motor Corp.’s (NYSE:TM) dominance  in Indonesia, but the U.S. automaker may have found a weapon to use in the rapidly growing market. Strong sales of the Chevy Spin minivan have allowed GM to start considering Indonesia a new battleground, making Toyota mobilize in an effort to maintain its stronghold in the region.

GM recently reopened a plant in Indonesia and has been producing its stripped-down, “no-frills” Spin vehicles that appeal to the local population. As a result, GM sold nearly 1,300 Spins in June, a remarkable figure when compared to the company’s 5,277 vehicles sold in Indonesia for all of 2012, Reuters reports. More than 73 percent of the 1,761 GM vehicles sold in Indonesia last month were the Chevy Spin minivan, a simple ride that is winning a number of fans.

GM relaunched its Indonesian plant this year — it closed in 2005 — marking the company’s efforts to challenge Toyota, which has 54 percent of the local market, according to Automotive News. GM executives, noticing the growing auto market in Indonesia (it grew 25 percent last year), have decided to push harder. Currently, GM controls less than 1 percent of the market. The Spin has been its biggest success in years, and Toyota has begun efforts to prevent local dealers from working with the U.S. automaker.

According to the Automotive News report, Toyota is having local dealers sign loyalty pledges to the company, which has paired up with Indonesia-based Astra to increase local influence. In addition to the loyalty pledges, Toyota told dealers it would take away any franchise arrangements if it discovered they were selling GM cars. GM has picked Marcos Purty to be in charge of the Indonesian offensive.

“We’ve got a car, built here and aimed at 40 percent of the market,” said Purty. “We’re finally up to bat, and we want to make a big dent.” GM CEO Dan Akerson said he wants to get closer to 10 percent of the Indonesia market in the next ten years, something he considers an achievable goal.

“Why give Japanese automakers a free safe haven?” he recently told Reuters.

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