Jakarta. General Motors Indonesia has appointed a new president director to make the company profitable again after it closed its assembly plant outside Jakarta and continues to lose ground to Japanese rivals.
“Our aim right now is to stabilize the company in Indonesia,” Gaurav Gupta, the new president director of GM Indonesia, said recently.
“We want to make sure we are able to take care our customers, improve our dealer network and make sure we could engage our consumers on a regular basis.”
Gupta previously served as managing director of GM Vietnam before being appointed to head the Indonesia office in July. The previous GM Indonesia chief, Michael Dunne, resigned in February, and chief financial officer Pranav Bhatt served as interim president director until Gupta was named.
Gupta has worked for GM since 1997, from retail network operations regional manager for GM Asia Pacific, based in Singapore, to strategic business and utility vehicles director for GM India.
In his latest posting, he faces a stern test getting the company’s finances in order in a market where GM has long lagged behind Japanese automakers such as Toyota, Daihatsu and Honda.
GM Indonesia reported losses of $200 million from 2013 to 2014 due to a poor sales and high operating costs, and closed down its assembly plant in Bekasi, on the eastern outskirts of Jakarta, in June this year – just over two years after opening it to great fanfare to produce its Chevrolet Spin MPV.
The Spin was meant to compete against the best-selling models in the country, such as the Toyota Innova and Honda Mobilio, but failed to break the chokehold that the Japanese carmakers had on the market.
Gupta acknowledges that he comes into the market at a shaky time for the domestic car industry.
Sales in the first half of 2015 amounted to just over 525,000 units, down 18 percent from the same period last year, according to the manufacturers’ association, or Gaikindo. The association has cut its full-year sales target to 1.1 million this year, from initial target of 1.2 million, which would mark the second straight year of declining sales.
“The current trend, which is lower than last year, is a bit worrisome for everybody, but we do understand there are investments being made and some policies being done by the government to build up the economy,” Gupta said.
“The fall in six or seven months will be difficult to recover in the next five months, but we are optimistic for the future and we will bend accordingly for the future.”
GM Indonesia continues to sell the Spin as well as the Chevrolet Orlando MPV and Captiva SUV which it imports from South Korea and Thailand, respectively. Unlike some other importers, it benefits from a lower import tax under Indonesia’s free-trade agreement with Asean countries and the bloc’s major trading partners: Japan, South Korea and India.
The arrangement also shields GM Indonesia from an increase in the import tax that took effect last month. Under that new policy, all vehicles imported from outside the FTA countries are now subjected to a 50 percent tax, up from the previous 40 percent, for completely built-up cars, and 10 percent for completely knocked-down cars.
Gupta said GM Indonesia was “supportive” of the policy.
“We really hope and wish that the policies that are implemented are going to be stable and consistent. That is very important for any company or any investors from a planning perspective,” he said.
Gupta said he had devised a new marketing strategy centered around consumers’ needs. This includes setting up better training programs for front-line employees in workshops and call centers, and providing a 24-hour help desk.
“Our objective will be to make the Chevrolet business into a sustainable and profitable business by focusing on our customers and keeping them as the center of everything we’re doing,” he said.
GM Indonesia will be among the carmakers taking part in the inaugural Gaikindo Indonesia International Auto Show, which opens at the Indonesia Convention and Exhibition (ICE) center in the BSD township west of Jakarta.
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