Revamping key minivan to defend Southeast Asian market

WATARU SUZUKI, Nikkei staff writer


JAKARTA -- Toyota Motor on Monday unveiled a full-scale revamp of its best-selling minivan Kijang Innova for the first time in 11 years as the carmaker tries to defend market share while the economy remains weak.The car features a new engine for its diesel vehicles, a flashy exterior design and an interior equipped with the latest technology, including an entertainment system with voice control functions. It is also targeting higher-end customers: the price tag of its highest grade model costs more than 400 million rupiah ($28,000), whereas the previous model typically sold in the 300 million rupiah range. "This year, the automotive industry has encountered a challenging market," said Hiroyuki Fukui, the president of Toyota-Astra Motor, a joint venture between Toyota and Indonesia's Astra International. "We are optimistic that the all-new [Kijang] Innova will continue the success story that has once shaped the Indonesian automotive market."


"Indonesia is now in a transition period" in which minivans are starting to be replaced by more design-conscious and usually more pricey sport utility vehicles, said Hiroki Nakajima, Toyota's executive chief engineer. "We want this model to bridge the gap."


Toyota is targeting sales of 4,000 units per month. The previous Kijang Innova is exported to 11 countries, mainly in the Middle East. The company did not reveal details on when the new model will be launched in other countries.


The revamp is part of a broader renewal of Toyota's "Innovative International Multi-purpose Vehicle" or IMV project -- vehicles designed for emerging markets. Toyota launched new models of its pickup truck and SUV in Thailand earlier this year.


Indonesia holds a strategic importance for Toyota. The country is the largest car market in Southeast Asia, where Toyota vehicles are popular. Kijang Innova's predecessor, the Kijang, was first launched in 1977 and became the pioneer for family cars locally as well as one of the best-selling models. It was renewed as Kijang Innova in 2004 after Toyota launched its IMV project.


The latest Kijang Innova will also test whether Toyota can withstand the current economic headwinds. Indonesia's domestic car sales declined 18% year-on-year to 853,008 units in the 10 months ended October, and are projected to end the year at their level lowest since 2011. This comes amid rising cost pressures from the weak rupiah. Toyota's dominance in Indonesia, where it holds nearly a third of the car market, has also come under intense pressure from other Japanese carmakers.