Automotive - 2M24 car sales dropped, yet inched up on a mom basis

Automotive - 2M24 car sales dropped, yet inched up on a mom basis Yesterday afternoon, we received an update from Astra on the February 24 4W sales figure. Total car sales came in at 70,656 units in Feb24, bringing total sales to 140,273 units in 2M24 period. On a cumulative basis, it dropped by 22.6% year on year, yet slightly improved on a monthly basis by 1.5% mom (Feb23: -7.6% mom). Astra continues to dominate the landscape competition with a growth of 8.6% mom, thanks to solid Toyota and Lexus sales volumes of 23,732 units (12.4% mom). On the contrary, non-Astra total sales declined by 7.0% mom, triggered mainly by poor sales from non-Japanese cars such as Wuling (44.9% mom) and Hyundai (19.1% mom). Suzuki and Mitsubishi also recorded lower sales by 18.7% mom and 8.4% mom, respectively. (Source : ASII, Gaikindo). Comment : We expect sales in Mar24 to record another higher figure on the back of the Ramadhan momentum trend. Yet, we might witness that sales volume in 1Q24 could remain weak on a year-over-year basis due to the high base effect in 1Q23 and Mar23 (101,272 units). We believe 1mn trap 4W sales will remain intact, even assuming car loan yields dropped by more than 50 bps. Better public transportation, spending power, economic distribution, and economic per capita are several factors that we believe will make car sales continue to stagnate in that amount (1 mn units). On the homologation update, we think there will be a minor impact on Astra car sales, and thus we are still optimistic that Astra will continue to rule the domestic car sales playfield (‘24F market share: 55% vs. 56% in FY23). We expect ‘24F 4W sales volume of 1.05 mn units (flat vs. FY23 of 1 mn units), or slightly below the Gaikindo projection of 1.1 mn units. Maintain the OW stance for the automotive sector.