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iversified conglomerate PT Astra International is bracing for lower sales of its four-wheel automotive division due to rising competition, cuts in fuel subsidies and the implementation of higher down payments for sharia financing.

Astra director Johnny Darmawan, who is also CEO of Toyota Astra Motor and vice chairman of the Association of Indonesian Automotive Manufacturers (Gaikindo), said that the national market would likely see lower car sales of 1 million to 1.05 million by the year's end.

'Looking at a number of factors, including the cut in the fuel subsidy, sharia down payments, the weakening exchange rate and delay of regulations over LCGC [low-cost green cars], we may see lower car sales compared to last year,' Johnny said.

The country's total car sales hit an all-time high of 1.12 million in 2012.

'Astra expects to maintain market share of 53-54 percent by year-end,' Johnny said.

According to figures from Gaikindo, Astra sold 605,191 cars last year, about 54 percent of total national sales. The company, according to Gaikindo data, sold 154,870 cars during January to March of this year, increasing 7 percent from 145,326 sales during the same period last year. Despite the increase, the company's market share fell to only 52 percent at the end of March as national car sales rose faster by 18 percent to 295,909 in the first three months of the year compared to the same period last year.

'We posted lower growth than the industry's average as competitors doubled their capacity. We didn't see this tough competition in the first quarter of last year, as their supplies remained affected by the floods in Thailand,' Johnny said.

Astra currently owns a number of brands, including Daihatsu, Isuzu, UD Trucks, Toyota and Peugeot. Meanwhile, other brands, including Mitsubishi, Suzuki, Nissan and Honda, reported combined sales growth of around 34 percent in the first quarter to 141,039 cars sold from 105,504 year-on-year.

Astra expects to achieve more sales once the government issues the regulation on low-cost cars. The company's director, Sudirman M. Rusdi, said that Astra had been prepared to produce LCGCs since November last year. The company had expected to be producing up to 17,000 Daihatsu Aylas and Toyota Agyas as of this April, he said.

In addition to the greater pressure on sales of its four-wheel vehicle, Astra is also expecting national sales figures for its motorcycles to stagnate due to the fuel-price hike and higher sharia financing down payments.

'Total motorcycle sales might be similar to last year's 7 million,' director Johannes Loman, who is also the president director of Astra Honda Motor (AHM), said.

Astra president director Prijono Sugiarto said that 2013 would not be an easy year for the company following the pressures on the automotive sector, the main contributor to the conglomerate's revenue, whose businesses extend into the financial and mining sectors.

'We are trying to be efficient. We are increasing capital expenditure instead of reducing it. Competition is getting tighter, but we are certain of our service,' Prijono said.

Shares in Astra (ASII) tumbled by 5.77 percent to Rp 7,350 apiece on Thursday compared to a day earlier, following its announcement of a 7 percent decline in net profits.