When Brand and Public Policy Collide: JKT48 and the New Honda Brio

PT. Honda Prospect Motor, the sole agent and assembler of of Honda automobiles & component in Indonesia, revealed JKT48 as brand ambassador for its New Honda Brio line of automobiles on 11 September. At the launching ceremony, three new Honda Brio models were announced for the Indonesian automobile market in response to the Low Cost Green Car (LCGC) program.

According to Honda, it has sold 14,914 units of the original Brio model through August 2013. It was first launched on 2 August 2012. Honda also bills the Brio as “the best selling city car in the country”. It should be no surprise then that, when the Indonesian government authorized tax incentives for automakers in May to produce LCGCs, Honda and other manufacturers jumped on-board. Since then, the Ministry and Industry and Ministry of Finance have reaffirmed their commitment to support automobile manufacturers who produce LCGCs for the Indonesian market.

More than three million automobiles were sold in ASEAN last year. In Indonesia alone, 1.1 million new units were sold, second only to Thailand at 1.3 million. Indonesia’s growing middle class is driving sales growth in the country, and it is likely that the car-owning population will grow with the introduction of low cost vehicles. The government wants to make Indonesia a production hub for low cost green cars ahead of the introduction of the ASEAN Economic Community in 2015, but such effort has not been met with equal development of the country’s public infrastructure.

This is a major concern for overcrowded urban areas like Jakarta, where traffic congestion has become a part of daily life. According to Indonesia Effort for Environment, there are currently 38.7 million vehicles operating in the Greater Jakarta area: 26.1 million motorcycles, 5.3 million cars, 1.3 million buses, and 6.1 million trucks. An August article in The New York Times also points out serious concerns with the city’s public transportation projects.

Opposition has been growing among Jakarta’s leaders and residents, and both Governor Joko Widodo and Deputy Governor Basuki Tjahaja Purnama have protested the government’s regulation. Observers are concerned that low cost cars will encourage motorcycle owners to switch to bigger vehicles and placing more burden on the city’s infrastructure. It is estimated that half of LCGC sales in the country will be made in Jakarta.

Indonesia’s netizens, including JKT48 enthusiasts, have also voiced their concerns over the incentive program. JKT48 targets a very young market segment who are future consumers of the automobile industry. The partnership may have been borne out of convenience needs corporate sponsorship to become more visible to the public, but social responsibility should not take a back seat to the the desire for quick profit. This is a relationship that is becoming unpopular among Indonesians in recent years.

JKT48 is an entertainment act that is unique in Indonesia and has the potential to change the way the industry markets its celebrities. Its management should not squander that potential on gimmicks that are unpopular with the public. Management must look at the bigger picture of Indonesia and its demographic intricacies in order to appeal to the true characteristics of the people. Indonesia may have an extensive corporate and bureaucratic history, but its grassroots spirit has been the primary driver of the nation’s development.

Sources: Honda Motor Company, MIX Marketing Communications, Environment News Service, The Jakarta Post