Harvesting trust in TAM
Always happy to talk to the media, Toyota Astra Motor chief Johnny Dharmawan shares his thoughts with GlobeAsia. The concerted building of trust has made Johnny Darmawan a successful CEO. The president director of Toyota Astra Motor (TAM) has taken the company through crises to enhance the Toyota brand’s dominance in the Indonesian automotive market. He is well trusted by the principal, and has been showered with honors by the industry.
He has taken a bold path by refreshing the company’s “wining team,” handing the baton of leadership to younger colleagues. Last year Johnny was named Best of the Best CEO by Warta Ekonomi magazine, following on his 2009 award as Best CEO from SWA magazine and Marketing Champion from MarkPlus.
All his success, he says, is based on his commitment to continuously elevate services, quality of products and networks. “Our concern on services includes workshop services and after-sales services. These are the keys to success,” says Johnny.
Born in Jakarta on 1 August 1952, Johnny had no formal footing in either marketing or automotives. He graduated as an accountant from Trisakti University in 1977 and began work as an auditor at PricewaterhouseCoopers. In 1983, he moved to Multi Astra, continuing to work as an auditor. His talent was spotted, and after a number of director positions at Astra Group companies, in 2002 Johnny was appointed CEO of Toyota Astra Motor.
Since the first time he was trusted to lead the company, Johnny has clung to three important elements of a successful corporation: product, people and service. On product, he has driven the company to always seek products with good quality and technology. On people, Johnny applied values of Toyota Way, such as continuous improvement and respect for people. On service, he emphasized partnerships between local networks and authorized dealers throughout Indonesia.
“I know myself. I was an accountant, not a guy who came from an automotive industry background. So, first of all, the important thing for me is to have the trust. And to get the trust from our principal, I had to be able to get their respect by achieving all my targets”.
Johnny believes that once respect has been achieved, gaining trust will come easier. Within two years of becoming CEO, he had achieved the goal set for him by the Japanese principal, to take Indonesia into the list of the 10 biggest markets for Toyota sales and to grab 30% of the Indonesian market.
Johnny went on to outstrip those initial targets. In 2009, Indonesia made its entry to the big five markets for Toyota. Last year, increased sales saw the country jump to fourth on the Toyota ranks, behind only the US, Japan and China.
“I feel very proud that the Indonesian market is so big. This achievement has made the principal greatly respect Indonesia, and trust my team. When we have this respect, it is easy for me to ‘drive the wind.’ My key word is; local people must know better.”
And how has he managed to fulfill every target? “By refreshing the team. I created a team of young guys, and gave the trust to local people. I think that was the key to our success.”
Toyota’s legendary brand in Indonesia, the Kijang, remains respected. Driving the old Toyota Kijang remains a surprisingly quiet experience, less noisy than some of the latest models in the same class. “We designed the Kijang especially for Indonesia’s conditions. We made it stronger and suitable for the conditions here”. Now, Johnny is dreaming of working with Toyota to create a new legend. “We are now preparing to create a ‘new Kijang,’ a car really suitable for Indonesians’ needs.”
In reality, the collaboration of Toyota and Daihatsu has already carved out a new legend. Since the first Avanza family car in 2003 up until first semester 2012, sales have exceeded 800,000 units.
Avanza appeals to the market segment that wants a taste of Kijang but at a cheaper price. “Toyota Avanza is continuously number one in its segment,” says Johnny. Starting with only one variant, the Avanza now boasts seven.
Every year, sales figures for the car that won the Car of the Year Award for 2012 continue to increase. In 2010, sales per month reached 11,800 units, increasing to 13,500 units per month in 2011. In the first semester of 2012, Avanza sales per month reached 16,500 units.
Widyawati Soedigdo, GM corporate planning and public relations at PT Toyota Astra Motor, says success stretches the company’s ability to fulfill demand. “Orders are far above our sales, between 20,000 and 21,000 units per month,” Widyawati states.
The success of TAM, especially in sales of Avanza and its Daihatsu-branded clone, the Xenia, also provides advantage for spare parts companies, especially Astra Otoparts. “The high demand for Avanza creates high demand for our spare parts. We see the demand continuing to grow, and this year we will build a new manufacturing plant,” adds Siswanto Prawiro Admodjo, president director of Astra Otoparts.
In line with Johnny’s dream to create a new legend, Toyota Astra Motor has also been preparing a low-cost car in collaboration with Daihatsu (a Toyota subsidiary), as part of the low-cost green car program introduced by the government. “Just wait for D-day. It will be priced around Rp100 million,” says Johnny.
In first-half 2012, Toyota confirmed its position as market leader with 37.8% of the Indonesian four-wheel market. The national industry recorded sales of 535,263 units in the period, with Toyota sales reaching 202,519 units. The market share represented an advance over 36.5% for the same period a year earlier.
“We had already surpassed our target in the beginning of the year, to reach 36% of market share. It is because of the trust of the customers and the positive economic growth,” says an ebullient Johnny.
Toyota leads in almost all segments. In sedans, Toyota enjoys 57.4% of the market with its Vios, Altis and Limo (for taxis) models. shares. In the compact car segment, the Yaris, with sales of 12,910 units, had 36.3% of the market in the first half, well up on the 30.2% of last years’ market. In passenger vehicles as a whole, Toyota sales reached 187,934 units, confirming its domination of the market with a market share rising from 49.6% to 50.4%.
TAM also succeeded in launching the Lexus into Indonesia five years ago. “We brought the Lexus here not with any intention to compete,” recalls Johnny. “It was because some of our customers asked us to bring it into Indonesia, because they recognized it as the high-end product of Toyota, offering luxury, convenience and a vehicle that is personalized.
“The demand for Lexus is growing every year, and last year we sold 470 units. This year our target is to sell 600 units. Up until the end of July, we had already sold 286,” says a beaming Johnny.