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Analysis: January auto sales: 4W Decent; 2W Weak

Based on sales figures released by the Association of Indonesian Automotive Manufacturers (Gaikindo) and the Indonesian Motorcycle Manufacturers Association (AISI) for January, four-wheel-vehicle (4W) sales reached 103,500 units, up 7 percent year-on-year (y-o-y) and 7 percent month-to-month (m-m), with two-wheel-vehicle (2W) sales totaling 579,000 units, down 10 percent y-o-y but up 5 percent m-m (Exhibits 3&4)

Leonardo Henry Gavaza (The Jakarta Post)
Thu, February 20, 2014

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Analysis: January auto sales: 4W Decent; 2W Weak

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ased on sales figures released by the Association of Indonesian Automotive Manufacturers (Gaikindo) and the Indonesian Motorcycle Manufacturers Association (AISI) for January, four-wheel-vehicle (4W) sales reached 103,500 units, up 7 percent year-on-year (y-o-y) and 7 percent month-to-month (m-m), with two-wheel-vehicle (2W) sales totaling 579,000 units, down 10 percent y-o-y but up 5 percent m-m (Exhibits 3&4).

Astra International (ASII) booked January sales of 55,000 units, up 7 percent y-o-y and up 5 percent m-m, reflecting a market share of 53 percent (Jan. 13: 53.2 percent).

This is due to the strong sales of its low-cost green car (LCGC) models Agya and Ayla, which reached 10,000 units, representing 19 percent of total ASII January sales.

On the other hand, Nissan booked weak January sales of 4,100 units, down 30 percent y-o-y and 13 percent m-m.

This reflected through a market share decline to 4 percent (Jan. 13: 6 percent) due to strong competition from Suzuki and Honda in the multipurpose vehicle (MPV) and LCGC segments (Exhibit 1).

Honda started distributing its new low-cost MPV segment brand Mobilio in January, with continued solid sales from its LCGC segment model Brio Satya.

On the flip side, Suzuki maintained its strong presence in the 4W market through its MPV segment model Ertiga and LCGC segment brand Wagon R.

On the 2W market, January sales were severely impacted by logistics disruptions due to severe flooding in many cities throughout Java.

Honda'€™s January sales reached 367,000 units, down 8 percent y-o-y but up 7 percent m-m, reflecting a market share of 63.3 percent (Jan. 13: 61.6 percent) on weak 2W market demand.

Yamaha also booked weak January sales of 174,000 units, down 15 percent y-o-y but up 6 percent m-m (Exhibit 2).

At this stage, we expect 4W sales to reach 1.3 million units in 2014, up 8 percent, and 1.56 million units in 2015, up 18 percent.

We see intensifying competition in the MPV segment with the introduction of Honda Mobilio, likely to usurp Nissan'€™s market share.

In conclusion, we expect growth in 2014 to come from LCGC segment as we expect ASII'€™s 2014-2015 market share to remain strong at 53 percent and Nissan'€™s 2014-2015 market share to remain at around 6 percent.

For the 2W market, we expect local sales to reach 7.8 million units in 2014, up 3 percent, and to rise to 8.3 million units in 2015, up 6 percent y-o-y.

With improving domestic auto sales forecasts offset by the current tight competition, the sector'€™s performance remains unexciting in our view and we reiterate our neutral stance on the Indonesian automotive industry.



The writer is an analyst at PT Bahana Securities.

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