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Indonesia’s LCGC: what’s going right, and wrong, so far

Indonesia’s low-cost green car (LCGC) policy has achieved a number of successes, however, government needs to focus more on the programme’s overall sustainability for it to achieve its goals. Ipsos Business Consulting’s Domy Halim and Phong Quach discuss the above issues and how Southeast Asia’s largest economy is performing compared with its Asean counterparts in “Indonesia’s LCGC: what’s going right, and wrong, so far”, an article in Automotive World. When Jakarta launched the initiative in 2013, LCGC cars accounted for 6% of auto sales, or 51,180 vehicles. While Halim is confident this will 22% this year, he says the policy is yet to achieve its core goals. “The introduction of LCGC in Indonesia was supposed to encourage the motorcycle owners/public transportation users to be able to afford their first cars,” he says. “To ensure the affordability, the government abolished the luxury vehicle tax to the cars. However, we estimated that about 70% of owners have the LCGC as their second or third cars.” As only 30% of people purchasing LCGC cars were first-time buyers, the policy has so far benefited the middle-class more than the lower income earners it was targeting. On an industry level, it has helped local manufacturers. About 85% of LCGC components are currently produced locally and the industry is on track to reach its goal of 100% by 2019. However, to make the process more effective, Halim says the government should encourage self-sufficiency in raw material production. “Given the critical raw materials currently still dependent on imports until the foreseeable future, the LCGC introduction has not fully achieved its original intent to further develop the automotive eco-system up to Tier 2 and the raw material supply chain.”
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Ford calls it quits in key Asian markets

Ford will withdraw from the Japanese and Indonesian markets by the year-end, due to the automaker’s lack of local manufacturing and weak penetration in core segments, Ipsos Business Consulting’s Roger Ma and Donny Halim tell Automotive World. The company is exiting Japan due to a weak foothold in a market dominated by German carmakers, says Roger Ma, Consulting Manager from Ipsos Business Consulting in Japan. He told Automotive World that BMW, Mercedes-Benz and VW account for almost 75% of the imported car market. Jeep leads the US brands, followed by Ford, which sold less than 5,000 vehicles last year. “The company’s sales volume is substantially lower than the European rival competitors,” he said. Indonesia has proved to be another challenging market for Ford, said Domy Halim, Indonesia Senior Consulting Manager at Ipsos Business Consulting, with its sales plummeting from about 15,700 in 2011 to just 5,000 last year. The three key reasons for its failure in Indonesia were: lack of accessibility, high product cost, and challenges from rivals, said Halim.
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Spurred by the spirit of the country to help companies expand

Mr. Douglas Cassidy, the Head of Business Consulting in Indonesia told Jakarta Post " Strongly directive management styles are generally not required in an organization filled with talented, highly educated and highly motivated people.".

 

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Japan: The Test Market for the Coming Global Dementia Tsunami

By 2025, one in three senior citizens in Japan, an estimated 13 million (10% of its total population), will be suffering from some form of dementia-based impairment. Not only is Japan facing a labour shortage due to a rapidly aging population, but the cost of providing health and social care for the nation's dementia sufferers has already totaled ¥14.5 trillion in 2014. In early 2015 the Japanese Government adopted a comprehensive national strategy on dementia known as the New Orange Plan. The strategy features seven pillars, and is aimed at providing appropriate medical care and support for patients and their families as well as ensuring closer cooperation across government ministries and agencies. Dementia is now a challenge faced by governments around the world, and Ipsos believes the experiment currently taking place in Japan will be closely watched by all societies facing similar issues in the years to come.

 

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Inside Self Storage - Assessing Opportunities in Greater China

Hong Kong pioneered Asia’s self-storage market and now boasts more than 3million-square-feet of storage space with 93 companies operating some 524 locations at the end of 2014. Scarcity of space, high population density and astronomic land prices have fuelled the industry’s growth in recent years. However, companies looking to top this growth should look further afield, write IBC’s Markus Scherer and Samson Lam in the Fall 2015 issue of Inside Self-Storage International magazine.
In the article, “Assessing Opportunities in Greater China” (p.g. 22–23) they shed light on how Mainland China offers significant opportunities due to its unparalleled size. Vast regional differences mean the “self-storage market is extremely fragmented, making it more difficult for players, as there’s no one-size-fits-all formula for success. Although some large operators have established a foothold in the market and have aggressive plans for expansion, much education is needed to convince Chinese consumers of the benefits of self-storage and how it can fit into their lives as a practical, convenient lifestyle option.” Ipsos Business Consulting also predicts Taiwan will grow by 20% over the same period, though from a lower base, tailed by Malaysia and Thailand, both set to expand by 6-10% by 2019.

 

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