I saw that a brand new Toyota avanza costs arround 14k euros in Indonesia.
This seems very cheap for me. For sure toyota saves on some parts so that the Cars can be Sold more cheaper over there.
Does anyone know how these Toyota can be sold so cheap in Indonesia?
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Because those Toyotas are made in Indonesia and are subject to MUCH less taxes. Japanese imported Toyotas, BMWs, Mercedes etc can be taxed more than 100% here. Also, the cars have much lower hp and specs in general.
Specifically for avanza, they don’t get taxed at all. You only pay regional government levy/fee. Indonesia only tax cars that meet at least one of few requirements:
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Local production factor (conceptual design, R&D, raw material, and spare parts) of less than 80%
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Displacement of 1.5L or higher
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Sedans
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Defintely not always the case.
The Kawasaki ZX-4RR costs thousands more in Indonesia than most other places. It’s already expensive in the US, but it’s crazy in Indonesia.
As other comments mentioned, there is a massive difference of tax between imported goods vs local products slapped with japanese badge
Cause they’re not greedy like USA is
Price fixing. Everyone charges Americans more because they can and we will buy it. Every state in America has its own price fixing scam going on. This is what happens when criminals run your country!
The Rav 4 is almost 3x cheaper in America than Denmark?
Why is it so cheap?
that likely has to do with VAT, tariffs, and fees based on engine power/size. America has basically none of those things.
There is a chance that is a cheap model manufactured for all those areas without all the mandatory safety system required to be sold in western countries?
Likely because it’s a pretty old model with not so many major changes, and that it’s built locally and that cars like the Avanza have a massive market share in Indonesia.
So it’s a Toyota. It may look like your Toyota, it may feel like your Toyota and it may have Toyota quality and last 20 years. But if you are an American, the Avanza is nothing you would want for the American roads. Cars are built and designed for each specific market. The market in the developing world does not have the same requirements as those in the developed world. Toyota has to cut costs and features to fit the demands of the local market.
How many people in the developing world will spend $60k on a car when it take the average person a lifetime to earn that? Not many. Even the upper middle class would not be able to afford it. In order to produce a quality vehicle at the lower price point, manufacturers cut features and capabilities. The add fewer inputs to the cars.
So for example, my Highlander has almost 300 hp. A Jetta which is a small American sedan has just around 158 hp. By contrast the much larger Avanza which is a van has just 105 hp. That’s less than 2/3 the engine capability of a much smaller vehicle. So while the engine on this van will work, it’d take forever to take it from 0-60mph.
Speed limit in Indonesia is 100 kmh, and unless you are on toll roads, the motorcycles won’t let you go higher than 50 kph.
Exactly like they said. Cars are designed for their area. My car has tons more power than Euro or Asian models because the roads are wide and distances far.
This is kinda perfect for Toyota’s low cost version of the Yaris van. Buyers especially won’t pay for the extra horsepower if they can’t use it.
Yup, and you don’t need the advanced safety system since you don’t go very fast, and this reduces the cost too.
My Suburban had 130 hp 30 years ago, and it’s okay in the city. The highways going up hills it has trouble with, but I’ve had other redditors tell me that highways don’t get as steep as the highways in my area are.
The Toyota Avanza has between 2/3 and 3/4 the power I do, but weighs half as much. Assuming gearing is good, it’ll be enough to keep up with city traffic.
Internationally speaking, a car that has “trouble” going up hills is far more acceptable elsewhere than it is in North America.
My 4Runner “has trouble” going up hills. Only 150 HP and takes a longer time to accelerate to traffic speeds.
The fact is most new cars these days (in US) can do 0-60 under 8 seconds and have like the equivalent of 250 HP- while being pretty comfy.
For comparison a base Toyota Corolla is 18.900 EUR in Slovenia.
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a base corolla in the us is the LE model, they don’t even sell the L model anymore (as far as I know). So base models everywhere are not the same.
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if you remove all the safety sense tech (which is standard here), airbags, cheaper fabric more plastic, eliminate the emissions system, the d4s and high-pressure fuel system, and the power mirrors and driver seats, now that really lower a lot of the cost.
So seeing that 21k corolla in the us/euro market can defiantly be cut to around 15k if we get rid of the emissions and tech in it.
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Exchange rate obviously. I converted 14k eur to idr, it’s not cheap at all. Only 10-20% of the people in jakarta make that amount annually. They won’t be able to buy them cash
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Many comments here are not aware of the existence of avanza. That’s because toyota in indonesia is only the brand. At least 80% of the production from conceptual design, raw material, to spare parts are designed, engineered, and produced locally by astra. In the avanza case, it’s a toyota-daihatsu joint. There are some toyota models that are designed based on the japanese concept and produced in indonesia, but they are entitled to a progressive regional government levy/fee. Corolla cross and vellfire are some popular examples
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Implication of #2 is lower production costs, from R&D, labor, bill of materials and components, to supply chain
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Wait until you see the build quality and everything will make sense. You get what you paid for to sum it up.
I’m going to say the crash standards or regulations in Indonesia are much less, if there are any at all. IDK. In the US, it takes big bucks to pass US regulations and that cost gets passed onto the US consumer.
Indonesia uses NCAP as opposed to IIHS. Specifically avanza, is rated 5 stars. ASEAN has a higher NCAP standard than global, but probably lower than Australian one