Sector Flash Note: Auto & Autoparts (Neutral), 1Q14 4W, 2W Vehicle Sales In Line

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Sector Flash Note:

Auto & Autoparts (Neutral)

1Q14 4W, 2W Vehicle Sales In Line

Domestic 1Q14 4W and 2W sales were in line with our forecasts, with 4W sales reaching 328.6k units (+11.0% y-o-y) while 2W sales were flat at 1,981k units (+1.0% y-o-y). ASII's 4W vehicles sales rose to 173.3k units (+11.9% y-o-y) while 2W sales totaled 1,254k units (+3.7% y-o-y).  On monthly basis, Honda was the winner, thanks to brisk sales of Mobilio, which was just launched in early 2014. This indicates rising competition in the domestic auto sector. Maintain NEUTRAL.

What’s new?

¨       Higher 4W sales but 2W flat. Domestic 1Q14 4W vehicle sales jumped 11.0% y-o-y to 328.6k units, while 2W vehicle sales were flat at 1,981k units (+1.0% y-o-y). Meanwhile, Astra International (ASII IJ, NEUTRAL, TP: IDR6,900)’s 4W vehicles sales grew 11.9% y-o-y to 173.3k units, and 2W sales rose 3.7% y-o-y to 1,254k units.

Our view

¨       1Q14 sales in line.  The higher 1Q14 4W and 2W vehicle sales were in line with our expectations, at 25.4% and 24.4% of both our full-year estimates respectively. ASII’s 2W market share strengthened to 63.2% in 1Q14 from 61.7% in 1Q13, while its share of the domestic 4W market ticked up to 52.8% in 1Q14 (from 52.3% in 1Q13), driven by robust sales of its low-cost green car (LCGC) models, Toyota Agya and Daihatsu Ayla. Elsewhere, the market share of Indomobil Sukses (IMAS IJ, NEUTRAL, TP: IDR4,500)’s Nissan marque shrank to 3.8% in 1Q14 from 5.6% in 1Q13.

¨       Honda’s car market share grows.  On monthly basis, Honda was the winner in the car market, thanks to robust sales of its low-MPV Mobilio, which was launched early this year. ASII’s market share slid to 51.3% in March from 54.1% in February owing to a drop in Daihatsu’s market share, which declined to 14.5% in March (from 17.0% in February). Daihatsu’s market share was partly eroded by Honda, which saw its market share expand to 12.8% in March vs 10.7% in February. By sales volume, Daihatsu Xenia’s fell to third place with 13,413 units sold in 1Q14 as the Honda Mobilio overtook it, clinching second place with 18,341 units sold that quarter. Nissan’s share of the domestic 4W vehicles market also fell, dropping to 3.7% in March vs 3.8% in February, while those of other brands were relatively flat. Maintain Neutral on Indonesia’s auto sector.

Best regards,

RHB OSK Indonesia Research Institute