Sector Overview
The Indonesian automobile sector has been facing challenging times, with October 2024 marking the 16th consecutive month of year-on-year decline in car sales. In this period, wholesale car unit sales amounted to 77,705 units, reflecting a 3.3% decline compared to the previous year. However, the rate of decline has slowed, showing signs of a potential market rebound. For the first ten months of 2024, total car sales declined by 14.3% year-on-year, totaling 716,520 units.
Toyota’s Dominance
Toyota remains a dominant force in the Indonesian market. Despite a 13.8% year-on-year decline in sales, Toyota holds a 34.1% market share, making it the market leader. The company’s stronghold is supported by top-selling models such as the Kijang Innova, Avanza, Calya, Rush, and Agya. Toyota’s performance in both September 2024 and the first nine months suggests resilience as it continues to lead in unit sales.
BYD’s Rising Influence
BYD has also been making significant strides, reclaiming the sixth spot in October 2024 after a brief dip in September. The BYD M6, a 7-seater Multi-Purpose Vehicle, has been pivotal in boosting BYD’s sales, rising to the 22nd position in the market by September. This model’s advanced technologies and competitive pricing have been well-received, contributing to the growing market share of battery electric vehicles (BEVs), which constituted 5.1% of total car sales by September 2024.
Electric Vehicles on the Rise
The Indonesian market is witnessing a gradual yet consistent increase in the adoption of BEVs. As of September 2024, BEVs accounted for 5.1% of total car sales, with a sales volume of 3,898 units. This trend is expected to continue, with projections indicating a potential surpassing of 10% market share by 2025-2026.
Astra International (ASII)
Astra International is a key player in the Indonesian automobile market. The company is recommended as a ‘BUY’ with a target price of Rp6,000, representing a 20.7% upside potential. The target price is equivalent to a 6.4x 2025F PE, while ASII is currently trading at a 5.4x 2025F PE, which is below -2SD 2025F PE. This valuation suggests a promising investment opportunity, bolstered by ASII’s strong market position and future growth prospects.
United Tractors (UNTR)
United Tractors, another significant entity in the sector, has been upgraded to a ‘HOLD’ with a target price of Rp30,000. This target price is pegged to a five-year -1.0SD PE of 5.5x 2025F PE. The revision from a -1.5SD to a -1.0SD PE is attributed to strong gold prices, providing a 13.9% upside potential from the current valuation. United Tractors’ strategic positioning and market dynamics make it a firm to watch in the coming years.
