In a sluggish automobile market, German automaker Mercedes-Benz aims to push up sales of sports utility vehicles (SUVs) in 2017, which may see strong demand from young and successful people.
SUVs accounted for 35 percent of Mercedes’ total sales of 2,724 cars in the first 10 months of this year, almost unchanged from the same period last year. Sixty five percent of the company’s sales derived from sedans and other models.
The contribution of SUV sales surged by 7 percent as of October, up from only 28 percent last year, Kariyanto Hardjosoemarto, deputy director of sales operations and product management at Mercedes-Benz Indonesia (MBI), said on Wednesday.
“According to market trends, SUV sales will increase higher than sedans next year,” he said on the sidelines of the 2016 Mercedes-Benz Star Expo.
Many customers preferred buying SUVs due to poor road conditions in the country, triggered by a number of ongoing infrastructure projects, while some also considered the risk of flood, Kariyanto said.
Despite the continuing domination of multi-purpose vehicles (MPVs) in Indonesia, the SUV market is expanding rapidly as seen by tighter competition among car manufacturers.
Major automakers like Toyota and Honda rolled out new models to tap into this potential market throughout this year.
In the premium SUV market, Mercedes has made a similar play, introducing its GLC model, along with its rival BMW, which launched the X3.
Although he declined to specify the firm’s sales target for next year, Kariyanto said Mercedes’ top-selling SUV models so far were the GLC, with prices ranging from Rp 899 million (US$66,494) to Rp 1.23 billion, and the GLE, sold for between Rp 1.09 billion and Rp 1.56 billion.
Behind the growth of Mercedes’ SUV segment are female customers, who apparently choose the model for reasons of safety combined with the comfort that resembles a sedan, according to MBI deputy director of marketing communication Hari Arifianto.
“Women accounted for 20 percent of our SUV buyers,” he told.
Amid a persistent economic slowdown that has squeezed people’s purchasing power, the domestic automotive market has gone through a bleak few years of late.
Car sales, an indicator of consumption in Southeast Asia’s largest economy, only rose by 2.55 percent to 874,847 cars in the January-October period from last year, according to data from the Indonesian Automotive Manufacturers Association (Gaikindo). Sales in October alone went up by just 3.8 percent to 91,846 cars.
Citing data from Gaikindo, Kariyanto said premium car sales had increased by 0.3 percent year-to-date.
Despite the flat growth, the firm is optimistic that the luxury car market will recover next year on the back of Indonesia’s demographic bonus, which is marked by a large pool of productive people.
This outlook underpins the company’s plan to focus on selling cars to young and successful people.
“CEOs of online marketplaces or owners of app-based startups are all our targets,” Hari said.
The company hopes that the so-called new generation compact cars, which consist of the A-Class, the CLA and the GLA, will attract younger buyers.
Comprising sedans and SUVs, the cars are sold at more affordable prices, starting from around Rp 600 million.
Mercedes launched more than 10 product line-ups this year. On Wednesday, the company unveiled its two latest models, namely the Mercedes-Benz AMG S 63 Coupe and the Mercedes-Benz SL 400, sold for around Rp 6 billion and Rp 2 billion, respectively.
