Flash Note Automotive Sector

24 November 2010

Paving Way for New Record High Overweight

• Strong volume in October 2010 ensures new record high this year. Domestic automotive market rose
significantly in October 2010, ensuring that both 4W and 2W sales volume will reach new record highs this year.
Total 4W sold during October was 69,129 units, a 40.7% MoM jump from 49,134 units in September, which for the
industry is normally considered as weak season. This figure made total 10M10 4W sales volume to reach 625,329
units, surpassing the 12M record high booked in 2008 at 605,636 units. This figure accounts for 89.0% from 2010F
full year target of 700,000 units.
• 2W sales volume jumps as high as 4W. Similar with 4W market, 2W sales volume also rose significantly in
October with 45.1% MoM growth to 695,272 units or only 5.0% below its monthly record high at 732,132 units back
in August 2010. This strong October figure made total 10M10 sales volume reach 6.2mn units, ensuring that a new
annual record high will be booked this year as the previous record was at 6.2mn units booked in the 2008 period.
• Astra International dominates the 4W market… The 4W market is still dominated by Astra International (ASII,
Rp54,200, Buy) , which products accounted for 56.0% market share in October 2010 and 10M10. The company’s
brand, Toyota, holds 36.7% market share in October 2010 and 37.5% for 10M10. The next largest market share is
also owned by another Astra product, Daihatsu, with 15.5% market share in October 2010 and 14.9% in 10M10.
With this condition, it is clear that Astra is on its way to run the victory lap in 4W market for 2010F.
• …and also in 2W market. Meanwhile, despite the very tight competition in 2W market, Astra still managed to hold
the largest market share with 46.5% market share in October. This position was slightly lower compared to 47.9% in
August 2010 (less effective working days in September makes MoM comparison inconclusive) as its rival, Yamaha
managed to reduce the gap with higher market share of 45.3% in October 2010 from 43.2% in August 2010. Such
improvement was due to the launching of a new product as Yamaha had introduced its new sport variant, Byson.
The effort successfully won potential customer attention where some dealers said backlog for this product is as long
as two months. Nevertheless, we see this is a normal occurrence in times of new product launching and volume will
be normalized after distribution regularizes.
• Maintain overweight. In all, this October figure shows that robust growth momentum in automotive market
remains solid. A recent update affecting the industry is the government’s plan to reduce subsidized fuel consumption
by prohibiting private cars registered in 2005 and above to buy this gasoline. It is still difficult to asses the impact to
car sales and usage, however, given limited option for public transportation, we foresee the impact will be less
significant for domestic 4W sales volume. In addition, most of the new cars are equipped with more advanced
technology requiring higher octane and lead free gasoline. Thus, we still maintain our positive view on the domestic
automotive sales volume next year.

Exh. 1 : 4W sales Volume

700
625.3
605.6
600
533.9
483.8 486.0
500
434.7

400
th units

318.9
300

200

100

0
2004 2005 2006 2007 2008 2009 10M10

Bagus Hananto
bagus@nispsekuritas.com
62-21-8379 5238 ext.7311
Automotive Sector
Unit 10M09 10M10 YoY Oct-09 Aug-10 Sep-10 Oct-10 MoM
DAIHATSU 61,274 93,165 52.0% 8,024 9,766 6,627 10,693 61.4%
ISUZU 12,536 19,782 57.8% 1,440 2,133 1,485 2,403 61.8%
NISSAN DIESEL 986 2,146 117.6% 153 260 230 250 8.7%
TOYOTA 150,312 234,578 56.1% 20,648 22,655 18,423 25,347 37.6%
PEUGEOT 39 146 274.4% 6 24 12 28 133.3%
225,147 349,817 55.4% 30,271 34,838 26,777 38,721 44.6%
NON ASTRA
HONDA 32,935 50,428 53.1% 5,354 6,025 3,504 5,970 70.4%
MITSUBISHI 48,225 87,750 82.0% 6,297 9,310 7,299 9,407 28.9%
SUZUKI 36,199 58,041 60.3% 4,639 6,063 4,924 7,015 42.5%
OTHERS 47,255 79,293 67.8% 5,680 8,526 6,630 8,016 20.9%
164,614 275,512 67.4% 21,970 29,924 22,357 30,408 36.0%

Total 389,761 625,329 60.4% 52,241 64,762 49,134 69,129 40.7%

Source: Gaikindo

Exh. 2 : 2W sales Volume

7
6.2 6.2
5.9
6

5.1
5 4.7
4.4
3.9
4
mn units

-
2004 2005 2006 2007 2008 2009 10M10

(Unit) 10M09 10M10 YoY Oct-09 Aug-10 Sep-10 Oct-10 MoM

Honda 2,190,180 2,894,420 32.2% 292,338 350,669 220,346 323,154 46.7%
Non Astra
Yamaha 2,150,731 2,782,541 29.4% 279,049 316,447 208,690 315,060 51.0%
Suzuki 361,774 440,995 21.9% 38,065 54,325 43,079 47,699 10.7%
Kawasaki 47,891 68,292 42.6% 4,313 8,480 5,837 7,486 28.3%
TVS 0 16,291 n.a 0 2,061 1,158 1,771 52.9%
Others 3,114 1,696 -45.5% 214 150 130 102 -21.5%
Non Astra 2,563,510 3,309,815 n.a 321,641 381,463 258,894 372,118 43.7%

Total 2W 4,753,690 6,204,235 n.a 613,979 732,132 479,240 695,272 45.1%

Total 2W* 4,753,690 6,187,944 30.2%
* exclude TVS

Source: AISI

2
Automotive Sector

Exh. 3: Market Share

10M10 Oct-10
4W
Units Market Share Units Market Share
Astra
DAIHATSU 93,165 14.9% 10,693 15.5%
ISUZU 19,782 3.2% 2,403 3.5%
NISSAN DIESEL 2,146 0.3% 250 0.4%
TOYOTA 234,578 37.5% 25,347 36.7%
PEUGEOT 146 0.0% 28 0.0%
Total 349,817 55.9% 38,721 56.0%
Non Astra
HONDA 50,428 8.1% 5,970 8.6%
MITSUBISHI 87,750 14.0% 9,407 13.6%
SUZUKI 58,041 9.3% 7,015 10.1%
OTHERS 79,293 12.7% 8,016 11.6%
Total 275,512 44.1% 30,408 44.0%

Total Domestic 625,329 100.0% 69,129 100.0%

10M10 Oct-10
2W
Units Market Share Units Market Share
Astra
Honda 2,894,420 46.7% 323,154 46.5%
Non Astra
Yamaha 2,782,541 44.8% 315,060 45.3%
Suzuki 440,995 7.1% 47,699 6.9%
Kawasaki 68,292 1.1% 7,486 1.1%
TVS 16,291 0.3% 1,771 0.3%
Others 1,696 0.0% 102 0.0%
Total 3,309,815 53.3% 372,118 53.5%

Total 2W 6,204,235 100.0% 695,272 100.0%

Source: Gaikindo & AISI

3
Automotive Sector

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Rating Definitions
BUY : We expect this stock to give total return of above 15% over the next 12 months.
HOLD : We expect this stock to give total return of between -15% and 15% over the next 12 months.
SELL : We expect this stock to give total return of -15% or lower over the next 12 months.

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