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Stock Index
Bahana Securities

23 Oct 2019 | 18:05 WIB
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23 Oct 2019 | 18:05 WIB
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Analysis: Monthly auto sales: Feeble February

 

Based on sales figures released by Gaikindo (4W association) and AISI (2W association), February 4W sales slumped to 88.7k units, down 21% y-y and 6% m-m, with 2W sales reaching 556k units, down 18% y-y but up 11% m-m (exhibits 1 and 2).

ASII saw weak February sales of 43.5k units, down 28% y-y and 1% m-m, with sales of Avanza and Xenia struggling to improve on soft demand and intense competition from the Honda Mobilio. With support from the new Xtrail model, Nissan (IMAS) booked monthly sales of 3.4k units, down 20% y-y but up 87% m-m, while Honda booked solid sales of 13.7k units, up 15% y-y but down 19% m-m, helped by firm sales from the HRV and Mobilio.

Unlike its 4W brand performance, Honda 2W sales (ASII) reached 377k units, down 11% y-y but up 11% m-m, with a stable m-m market share of 67.8% (Jan-15: 67.6%; Feb-14: 62.4%). Yamaha monthly sales were even worse, coming in at 151k units, down 30% y-y but up 8% m-m.

Based on our channel checks, the local discounting trend has intensified in March (exhibit 3), despite the stronger dollar operating environment. With some experts expecting the launch of the new Toyota Innova in 3Q15, discounts on the model have risen significantly to IDR25mn (9%), with some dealers still selling 2014 stock at even deeper discounts of around IDR35mn (13%). We expect these conditions to continue to pressure margins for automotive companies.

The Honda HRV has started 2015 strongly, booking February monthly sales of 3.9k units, much higher than the usual SUV market leaders, the Toyota Rush (799 units) and the Daihatsu Terios (913 units). Demand for the HRV remains strong, with an order backlog of around 3 months. ASII’s MPV market share declined in 2014, eroded by the Mobilio launch, and we expect a similar situation to materialize in the SUV segment due to Honda’s HRV launch in January 2015.

Due to expected flat 4W sales volumes in 2015, we look for weak margins to persist on intensifying competition, as several leading brands, such as Toyota (ASII), Daihatsu (ASII) and Honda will likely reinvent their products to gain market share. We expect aggressive marketing in the multi-purpose vehicle (MPV) and SUV segments, leading to market-share erosion and margin pressure for ASII, while several new dealership developments should lead to pressure on IMAS’s margins, particularly given the weak IDR.


In sum, as we expect a reversal on several policy risks and poor monthly 4W and 2W sales through 2Q15 due to weak demand, we retain our UNDERWEIGHT sector call.

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