Bandung, IndonesiaSentinel.com — Volkswagen, one of the world’s most renowned automotive brands, is facing significant challenges in the Indonesian market as it struggles to compete with newer and more agile competitors. In a recent announcement, the company revealed that it is considering drastic measures, including potentially closing factories in Germany, as part of a broader effort to improve efficiency and regain market share.
Volkswagen sales in Indonesia, despite being modest, it significantly declined over the past year. It faces difficult challenges to boost its sales, particularly in the Indonesian market.
There are several factors that contribute to Volkswagen’s poor performance in Indonesia. One of the primary reasons is strong competition from more affordable Chinese brands like BYD and Wuling. These companies have been able to offer vehicles at lower price points, which are more appealing to price-sensitive Indonesian consumers.
Additionally, Volkswagen’s higher price range and limited model lineup make it less accessible for the average Indonesian buyer, especially when compared to local or Asian competitors. The high cost of importing models like the T-Cross from India adds to the price tag, reducing the brand’s competitiveness in a market where affordability is often a key factor in purchasing decisions.
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Volkswagen Sales in Indonesian Market
According to data from the Association of Indonesian Automotive Industries (Gaikindo), Volkswagen’s sales in Indonesian market remain modest. From January to July 2024, Volkswagen shipped only 52 units in total. The bulk of these sales came from the Volkswagen Tiguan, which accounted for 48 units. The Tiguan, assembled in Indonesia through a Completely Knocked Down (CKD) process, is the brand’s top seller in the country. Meanwhile, the Volkswagen T-Cross, imported entirely from India, contributed just 8 units to the total sales figure.
However, these numbers mark a significant decline compared to the same period in 2023. Last year, Volkswagen distributed 166 units between January and July. For the entire year of 2023, the brand managed to sell 247 units in Indonesia, reflecting a challenging year for the company. Despite this, Volkswagen ranked 27th out of 35 automotive brands in Indonesia in 2023, outpacing competitors such as Peugeot, Neta, Seres, Audi, Tata, Citroen, and Datsun.
In 2024, however, the company’s position has dropped to 34th place, signaling an even tougher market. Meanwhile, Chinese brands have rapidly gained traction in Indonesia. BYD, a relatively new player, has soared to 12th place, and Wuling, another Chinese brand, has secured the 10th spot, just ahead of Chery.
(Raidi/Agung)
