Toyota Avanza
INSTITUT TEKNOLOGI BANDUNG
SCHOOL OF BUSINESS AND MANAGEMENT
INDONESIA BUSINESS CASE CENTER (IBCC)
This case was written with the courtesy of Indonesiantower
003‐03‐07‐07
Rev.: 30/03/2009
TOYOTA AVANZA
THE ROLLOUT
Harni Winara, the Head of Marketing Planning & Analysis Department of Toyota Astra
Motor (TAM) Jakarta, Indonesia, identified a market opportunity in All Purposes Vehicle
(APV) low 4x2 segment in Indonesia. The figure was compelling and she was convinced that TAM had the capability to capture the market. However, she ought to carefully lay out a marketing strategy that upheld the Toyota image and customer expectation. She only had a couple of months before meeting with the VP of Marketing in April 2003.
Indonesian Automotive Industry
Triggered by the 1997 economic crisis in Asia, most Indonesian industries at large were negatively impacted. As a whole, the Indonesian economy was directly affected by reductions in wages, high unemployment rate, and increase in inflation rate, resulting in a major decrease in the country’s nominal income and purchasing power. The annual rate of inflation, calculated from the customer price index (CPI) rose from an average 8.8 percent during 1990-1996 to 57.6 percent in 1998 in Indonesia. Real wage growth slumped from 6.6 percent in 1996 to -37.8 percent during 1998. The road to economic recovery had been an uphill climb for Indonesia since then.
Automotive industry was inevitably impacted by the crisis since the drop in consumer purchasing power caused the price of vehicles to be far from affordable for the population.
Automotive market was shrinking from 400,000 vehicles sold in 1996 to a low 75,000 in
19981. Nonetheless, according to Demand Forecasting, Indonesian automotive industry was expected to show a constant growth with monthly average units sold from more than 26,000 in 2002 to nearly 45,000 units in 2005, indicating a strong market trend.
This case was written by Henri Suudi and Enjang D. Resi under the
SCHOOL OF BUSINESS AND MANAGEMENT
INDONESIA BUSINESS CASE CENTER (IBCC)
This case was written with the courtesy of Indonesiantower
003‐03‐07‐07
Rev.: 30/03/2009
TOYOTA AVANZA
THE ROLLOUT
Harni Winara, the Head of Marketing Planning & Analysis Department of Toyota Astra
Motor (TAM) Jakarta, Indonesia, identified a market opportunity in All Purposes Vehicle
(APV) low 4x2 segment in Indonesia. The figure was compelling and she was convinced that TAM had the capability to capture the market. However, she ought to carefully lay out a marketing strategy that upheld the Toyota image and customer expectation. She only had a couple of months before meeting with the VP of Marketing in April 2003.
Indonesian Automotive Industry
Triggered by the 1997 economic crisis in Asia, most Indonesian industries at large were negatively impacted. As a whole, the Indonesian economy was directly affected by reductions in wages, high unemployment rate, and increase in inflation rate, resulting in a major decrease in the country’s nominal income and purchasing power. The annual rate of inflation, calculated from the customer price index (CPI) rose from an average 8.8 percent during 1990-1996 to 57.6 percent in 1998 in Indonesia. Real wage growth slumped from 6.6 percent in 1996 to -37.8 percent during 1998. The road to economic recovery had been an uphill climb for Indonesia since then.
Automotive industry was inevitably impacted by the crisis since the drop in consumer purchasing power caused the price of vehicles to be far from affordable for the population.
Automotive market was shrinking from 400,000 vehicles sold in 1996 to a low 75,000 in
19981. Nonetheless, according to Demand Forecasting, Indonesian automotive industry was expected to show a constant growth with monthly average units sold from more than 26,000 in 2002 to nearly 45,000 units in 2005, indicating a strong market trend.
This case was written by Henri Suudi and Enjang D. Resi under the