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Indonesian Automotive: More pot holes ahead

Despite support from the Jakarta auto show, October 4W wholesale sales declined to 88k units, -5% m-m and -16% y-y (exhibit 1) based on sales figures released by Gaikindo (4W association). This is weaker than our expectation. Based on our channel check, October retail sales were even weaker than the wholesale ones as purchasing power has remained in doldrums. Thus, we expect 4W monthly sales to remain challenging in the following months.

In October, Astra International’s (ASII) market share hovered around the 51.7% level (Sep-15: 51.4%; Oct-14: 47.3%) with monthly sales at 45.6k units, -4% m-m and -8% y-y. We believe that the performance of ASII’s new products Toyota Avanza and Daihatsu Xenia were disappointing as monthly sales remained weak and discounts have been quite generous so far in November. Nissan booked October sales of 1.4k units, -17% m-m and -51% y-y, as Indomobil (IMAS) attempted to lower its inventory level of low-margin products with steep discounts.

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