Automobile financing firm PT Toyota Astra Financial Services (TAFS) hopes to maintain double-digit growth in financing this year despite the planned hike in fuel prices.

TAFS, a joint venture between giant car manufacturer PT Astra International (ASII) and Japan's Toyota Financial Services, expects its financing to grow 33 percent to Rp 11 trillion (US$1.13 billion) by year-end, it announced in Jakarta on Tuesday. In terms of car loans, it is looking to finance the purchase of more than 65,000 Toyota cars across the country, a 20 percent increase from 2012.

The company is optimistic it will be able to reach the target even though the government recently announced that would increase fuel prices for private vehicles this year, according to TAFS president director Buntoro Muljono.

'Hopefully, the effect [of fuel the price hike] will only be temporary. We are also optimistic because Toyota's market in the country remains big,' he said.

TAFS data show that the total sales of Toyota cars in Indonesia reached 400,000 units last year, 27.4 percent higher than in 2011 and growing by more than twofold from 2007. According to data from the Indonesian Automotive Industry Association (Gaikindo), Toyota has had the biggest automobile market share over the past five years with between 30 and 40 percent.

Latest statistics from the association suggest that in the first three months of this year, several players began to gain traction in the market as indicated by sales growth, including that of Toyota Astra Motor (TAM). TAM's sales increased 8.25 percent to 104,073 units year-on-year.

The positive growth has led automakers to be confident they will be able to reach their sales target of 1.2 million cars in the domestic market by year-end, up by 10 percent from 2012.

Meanwhile, TAFS lent money to purchase 8,255 cars in 2012, a 17.2 percent increase from 2011. The 2012 figure jumped almost four times since the company started its business in 2006. With higher car sales in 2012, its revenues surged 10 percent to Rp 1.4 trillion and its net profits were up 41.3 percent to
Rp 234 billion.

According to TAFS director Kurnadi Tandudjaja, the highest-selling models have been the Avanza and Kijang Innova MPVs, Fortuner SUV, Yaris hatchback and Camry and Corolla sedans.

As part of its financing plan, TAFS is hoping to generate Rp 1.2 trillion by selling debt papers in May. It will issue three series of bonds: A, B and C. The A series will mature after 370 days and offer an interest rate of
between 6.25 and 7.25 percent.

The B series will mature after three years with interest rate of 7.25 to 8.25 percent. Meanwhile, the C series will mature after four years and offer an interest rate of 7.25 to 8.25 percent. The bonds have obtained an AAA rating from PT Fitch Ratings Indonesia.

TAFS has appointed four underwriters for the bonds issuance: PT HSBC Securities Indonesia, PT Indo Premier Securities, PT Mandiri Sekuritas and PT Trimegah Securities. The book-building period will run until April 30 and the offering period will take place on May 13 and 14.

TASF is equally owned by Astra International and Toyota Financial Services.

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