Indonesia Automotive Outlook: 2013

Presented by Vivek Vaidya Vice President of Automotive & Transportation Practice, Asia Pacific 17th January 2013

CONTENTS

Indonesia Automotive Recap of 2012

Indonesia Automotive Outlook 2013

2

116. Frost & Sullivan Analysis. 3 3 .Indonesia hit the 1 million unit volume the first time in the history Total Industry Volume (TIV).450.000 1.000 2011 Indonesia Thailand 2012 (f) Malaysia • Indonesia surpassed 1-million unit sales and important landmark to gain importance globally • Thailand regained number 1 position.123 618. 2011 and 2012 1. Note: All figures are rounded. MAA. after spectacular recovery from flood-crisis in 2011 • Malaysia in the other hand were keeping the similar volume with the tightening finance policy Source: AAF.081 600. Gaikindo.000 894.164 794. TAIA (2012 ytd Nov).

000 0 Jan Feb 2011 Commercial Vehicle Monthly Sales Trend (2010 – 2012) 2010 2011 2012 Mar Apr May Jun Jul Aug Sep Oct Nov Dec Source: Gaikindo (2012 ytd Nov).Indonesia : Growth in 2012 supported by strong economic factors.9% Drivers • Positive domestic economic environment • Postponement of subsidized fuel restriction and price increment • Increasing buying power from middle class segment • Introduction of many new car models 894.000 40.000 80.710 16.000 (e) 335.2% 2010 Passenger Vehicle 120.500 223. successful new model launches and postponement of fuel price increase Total Industry Volume (TIV). Note: All figures are rounded.235 541.9% 601.475 292. Indonesia (2010-2012) Total 764.218 30.000 100.116.000 20.500 14. 4 4 .000 Units 60.945 29.6% 2012 (f) Restraints • Increment on down payment minimum rate • Partial restriction of subsidized fuel to CV segment • Slowing down of export commodities and mining industry 11.6% 780.7% 1.164 24. Frost & Sullivan Analysis.

000 Sedan 40.4% Monthly sales by segments (units) 100.000 20.000 70.000 50.000 100 Jan Feb Mar Apr May Jun Total PV Jul Aug Sep Oct Nov Dec 4X2 4X4 0 30. segment shares virtually unchanged from 2011 Passenger Vehicle Monthly Sales. Frost & Sullivan analysis. Data is for Passenger Vehicles only.0% 80. Sedan Source: Gaikindo(2012 ytd Nov).000 Sedan 4.000 1.9% Sedan 4.000 10.6% 4X4 0.000 4X4 10.5% 2011 4X2 94.6% Note: All figures are rounded. Indonesia (2012) Enforcement of higher minimum down payment Festivity holidays Indonesia Int’l Motor Show 2012 Passenger Vehicle Market Share 4X4 1. 5 5 .Indonesia : MPV and Hatchback (4X2) remained the largest segment.000 Total Monthly Sales (Units) 2012 4X2 94.000 4X2 60.

6 6 .500 % growth (2011-2012) 28. City.1% 29. Honda CR-V etc.945 2012(f) Total Sales 34. boosting sales of low and medium sedan category (alike of Vios. Daihatsu Xenia.Indonesia : Growth rate in each segment was spectacular.6% 41. Chevrolet Spin.800 780.521 601.802 5. Honda Brio • Upgrades : Toyota Avanza.100 738.622 569. Nissan Evalia. 2011 – 2012(f) Vehicle Segment Sedan 4X2 4X4 Total PV 2011 Total Sales 26. with highest volume growth in 4X2 segment Passenger Vehicle Segment sales – Indonesia. Civic and Camry) Source: Gaikindo (2012 ytd Nov).1% • 4X2 and 4X4 segments – successful model launches drove the segment volumes • New models : Suzuki Ertiga. • Sedan segment recovered from last year drop as the part supply from Thailand and Japan recovered.600 7. Frost & Sullivan analysis.3% 29.

Source: Gaikindo (2012 ytd Nov).3% 14.000 5.3% Double Cab 6.4% 2012 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total CV Bus Pickup/Truck Double Cab Pickup/ Truck 93.4% 8.5% Note: All figures are rounded. Indonesia (2012) Monthly sales by segments (units) Festivity holidays Export and some industry slowing down Vehicle Segment Bus Pickup/Truck % growth (2011-2012) 2.000 Total CV 20. Data is for commercial vehicles only 7 7 . Frost & Sullivan analysis.4% 15.7% Bus 1.000 15.000 Double Cab 25.000 10.8% 35.000 30.Indonesia – commercial vehicle : Pickup and truck sales growth supported by manufacturing and retail sectors Commercial Vehicle Monthly Sales.000 0 Passenger Vehicle Market Share Double Cab 5.1% Bus 1.0% 2011 Pickup /Truck 92.

3% Mitsubishi 15.1% 10.0% 13. in the other hand.9% 894.5% 15.000 (f) 9. 8 8 .164 9.5% market share.6% 14.7% 34.3% 1.Toyota.116. • Honda gains 1% share due to strong showing of Brio and new CR-V • Mitsubishi.0% Others Isuzu • Toyota retains market leadership with market share of about 36% • Market share up by 1% as compared to 2011 due to successful launch of all new Avanza • Daihatsu has shown good volume growth due to strong performance of Xenia but the market share drops by 1% • Suzuki gains 1.6% 6.3% Suzuki 13.1% market share with the high sales of its new MPV model Ertiga.0% 9.7% 36.5% 3. has lost 1.0% 6.2% 6.3% Toyota • Mitsubishi may decide to focus on passenger car segment a lot more to reverse the trend in 2013 2010 2011 2012 Note: All figures are rounded Source: various media (2012 ytd Nov) Frost & Sullivan analysis.710 8.3% Nissan Honda 5. 8.2% 11.1% 4.9% 15. Suzuki and Honda gain market shares while Mitsubishi and Daihatsu lose market share despite volume growth Vehicle Market Share by OEMs (2010-2012) 764.2% 3.5% 3.6% Daihatsu 36.

4% 1. 2009.3% Mining and Quarrying 12.4% Q1 '11 Q2 Q3 Q4 -1.5% 2.1% Manufacturing 23.6% 3.2% 3. Hotel and Restaurant 13.Healthy domestic led economic growth supported the automotive sector to increase its volumes GDP Growth Rates. 2012(f) Agriculture.4% Q1 '10 Q2 Q3 Q4 -1.3% Q1 '12 Q2 Q3 Q4 Economic Activity Breakdown.1% Trade.9% 1. Forestry and Fishery 15.1% Source: Central Bureau of Statistic (2012 ytd Q3). Analysis: Frost & Sullivan 9 9 .6% 2011: 6.8% 2.8% 3.7% Construction 10.9% 2010: 6.2% Q1 '09 Q2 Q3 Q4 -2.7% • Indonesia ‘s economic growth expected to be slightly above 6% • This is marginal decline as compared to 2011 due to the slowing export demand for commodity and restriction of mining product export • Manufacturing sector still remaining the biggest contributor.4% 2012(f): 6. Livestock.2% 2.3% 1.7% 1.9% 2. construction sector saw high growth in 2012 Others 25.5% 3.2012(f) 2009: 4.

city car. SUV MPV & SUV (~12 new models) Suzuki Ertiga Honda All New CR-V Sedan & City Cars (~7) Toyota All New Camry Honda All New Civic Suzuki All New Swift Honda Brio Suzuki Mega Carry Extra CV Toyota Nav1 Mitsubishi Outlander Mazda New BT-50 Mazda Biante Volkswagen New Touareg Chevrolet All New Colorado Nissan Evalia Audi Q3 Mitsubishi Mirage Ford All New Focus Peugeot 208 Ford New Ranger Chevrolet Spin Hyundai New Santa Fe Isuzu Giga F-series Volkswagen New Caravelle Suzuki New Grand Vitara (facelift) 10 .Model launches in 2012: most covering the biggest segment 4x2 with various body type – MPV.

CONTENTS Indonesia Automotive Recap of 2012 Indonesia Automotive Outlook 2013 11 .

the possibly growing sectors would be the sectors contributing much to the domestic economy. & Restaurant 0. livestock. Hotel. electricity. likely will be constructions.Economic Outlook 2013 : GDP growth expected to be about 6% fuelled by domestic consumption Economic Growth Rate.0% Manufacturing Construction Trade. gas and water supply Growing sectors 12 12 . agriculture.0% 2010 2011 2012 (f) 2013 (f) Others Real GDP • GDP growth is expected to remain stable around 5 – 6% • Will rely strongly on domestic economy and the inflowing investment Manufacturing • Still the biggest contributing sector • Shall see some growth with the condition of realization happening in 2013 from potential investment • With the growing domestic economy.0% Real GDP Agriculture Mining 5. 2009 – 2012 (f) 10. forestry & fishery.

The high growth phase is expected to continue. AEC will not be impacting growth as such. lower costs and regional access Retail Network Increase in number of dealers as new players enter the market and tackle the geographic complexity of the market Vehicle Exports Exports are likely to grow as AEC and FTAs will make it easier for OEMs to set up base and supply to other markets Supplier Base The relatively ‘under-developed’ vendor base is likely to get a boost as more OEMs come in to set up assembly and cater to the region Very favorable No impact Less favorable 13 .ASEAN Economic Community (AEC) initiative is likely to benefit Indonesia Areas Level Impact Largest market in ASEAN. Sales Production The local manufacturing is likely to see a big jump as Indonesia becomes more attractive as a regional hub for production Market Concentration Increase in competitive activity as Indonesia becomes more attractive in terms of a large market.

has been above 6%. and still will drive the market on 2013 onwards. supported by huge young population • Indonesia is predicted to have golden productivity period up to 2025. exchange rate. lending rate • Some minor issues from regulations arising and corruption cases. which will create more potential middle classes • Proven by increasing domestic consumption • 2013 economy may as well strongly rely to its high domestic consumption Stable politics Growing middle class Increasing income level Continuous investment flow 14 • Indonesia’s growing economy is still very attractive for more investment • Automotive sector investment reach 70% growth rate. but so far have not been impacting much to automotive and the market • Anticipation in 2013 for 2014 general election • Along better economy.Indonesia Auto 2013: Economic-driven market Indonesia market growth will rely on economical drivers Indonesia’s growth in automotive sector in recent years has largely being impacted by the nature and long term factors. valued more than US$ 1. They have driven the market previously. Good economy • Positive growing economy. arising the population of middle class. and predicted to be still at least 6% for 2013 • Stable inflation.3 billion as of 3rd quarter of 2012 • 2013 investment flow is expected to still grow around 30% .

progressive tax or luxury tax increasing ownership cost 15 15 . impacting to higher vehicle selling price Increasing vehicle tax rate • Possible increment on tax: title transfer fee.Indonesia Auto 2013: 6 key factors would impact growth in 2013 LEC-LCGC Program • The official announcement of the program might boost the market as there will be more affordable vehicles as options Rollback of subsidies • Official electricity tariffs increment taken place • Options of restriction or price increment on fuel Increasing standard labor minimum wages • Ever-high increment on minimum labor wages might impact the production cost of supplying industry Vehicle financing policy • Enforcement of minimum down payment to sharia financing by April 2013 will limit finance options to market Emission standard • Increment of higher standard to Euro3 or 4 might need procedural cost.

000 2012 2013 (f) 16 16 .500 Commercial Vehicles 360.6% Passenger Vehicles 840.2 million with 7.3% Passenger Vehicles 780.Frost & Sullivan projects TIV to reach 1.500 7.000 7.116.5% growth rate Total Industry Volume.000 TIV : 1. 2012-2013 (Indonesia) TIV : 1.200.000 Commercial Vehicles 335.

Assumptions for 1.2 million TIV forecast Positive Factors • Stable economic and political conditions in Indonesia • Investments in construction and infrastructure continue at the same rate • Timely implementation of LCE-LCGC program Negative Factors • Minimal impact of roll back of fuel subsidy and vehicle finance policy • Uncertainties in global economy 17 .

000 units in 2013 Total Industry Volumes by Vehicle Segments. • 4X2 segment would remain the main driver in 2013 as well due to favorable duty regime and impending LCGC launches which would be in the same segment 18 18 . 2012 and 2013 Passenger Vehicles Passenger vehicles : 780.000 2012 2013 (f) • 4X2 segment will remain the biggest segment as further market development shall be done for models launched in 2012 where most of them are in category 4X2.500 4X4 Sedan 4X2 7% 10% 7% Passenger Vehicles : 840.Passenger Vehicles would continue to grow to reach 840.

Commercial Vehicles market size would touch 360. 2012 and 2013 Commercial Vehicles Commercial Vehicle : 355.500 Commercial Vehicles : 360.000 in 2013 Total Industry Volumes by Vehicle Segments.000 Bus Double Cab Pickup /Truck 6% 8% 7% 2012 2013 (f) • Pick-up and small trucks would grow due to growth in manufacturing and retail sector. which is largely driven by consumption in domestic sector • Heavy trucks likely to grow on strong performance of construction and infrastructure sector which is largely driven by investments in this sector 19 19 .

Conclusions Indonesian Automotive market beat the predictions to reach 1 million units in 2012 Indonesia automotive 2013 will likely go up slow to 1. there is timely announcement of LEC-LCGC program and impact of fuel subsidy roll back and vehicle financing policy is minimal However. investment flow and infrastructure continues. stringent policies such as fuel subsidy roll back.2 million units if economic conditions remain stable. vehicle financing are implemented or if there is slowdown in global economic conditions volumes may decline and slip below 1 million units in 2013 20 20 .