It also said that its automotive line of business, which brought the biggest contribution to its revenue, would be affected by declining motorcycle sales, an anomaly amid improvement in prices of some commodities that usually trigger demand for vehicles.

“For the rest of this year, Astra Group will benefit from stable coal prices, although our performance will also be affected by the growing competition in the car industry and declining demand for motorcycles,” president director Prijono Sugiarto said in a press statement Thursday.

The strong competition in the car sales business was triggered by the presence of new car models that compete directly with the company’s products.

For instance, the presence of Chinese-Indonesian joint venture PT SAIC-General Motors-Wuling (SGMW) Motor Indonesia, also known as Wuling Motors, has increased competition in the country’s automotive industry.

Although Astra International launched one new model, and four revamped models from January to June, it saw a growth in its car sales by only 9 percent to 298,000 units.

On top of that, the nationwide motorcycle market remained sluggish as it dropped by 9 percent to 2.7 million units in the first half of 2017.

The company’s subsidiary, PT Astra Honda Motor (AHM), recorded a contraction in motorcycle sales, which dropped by 7 percent to 2 million units.

As a result, its net profit from the automotive segment rose only slightly by 9 percent year-on-year (yoy) to Rp 4.2 trillion (US$315.4 million).

“We will continue reinventing our products and improving after-sales services, in addition to expanding the distribution network,” said Tira Ardianti, the company’s investor relations head, when asked about its strategy to beat the competition.

The company’s other business lines, such as financial services, heavy machinery and mining, agribusiness and property, all expanded in the first half this year.

However, two sectors, information and technology as well as infrastructure and logistics, had declined in performance.

Overall, Astra Internasional’s consolidated revenue soared by 11 percent to Rp 98 trillion in the first six months of this year, while its net profit soared by 31 percent to Rp 9.4 trillion.

In financial services, the company’s net profit increased by 62 percent to Rp 2 trillion because of contributions from several of its multi-finance businesses, as well as publicly listed lender Bank Permata.

Bank Permata booked net profit after suffering losses last year. It posted Rp 621 billion in net income in the first half this year, compared to Rp 836 billion in losses seen in the same period in 2016.

In heavy equipment, Astra Group booked Rp 2.1 trillion in net profit, up by 83 percent yoy.

United Tractor — with 59.5 percent of shares owned by Astra — posted an increase of 85 percent in net profit to Rp 3.4 trillion. The company remained optimistic over the growth driven by increasing coal prices and the construction business.

Furthermore, construction services subsidiary PT Acset Indonusa, part of Astra Group through PT United Tractor, booked net profit of Rp 64.2 billion in the first half, a 95.7 percent increase compared to Rp 32.8 billion in the same period last year.

“The company’s revenue growth in the first half was supported by infrastructure projects,” said Acset Indonusa corporate secretary Maria Cesilia Hapsari.

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