Automotive - 865,000 car sold throughout 2024 exceeding Gaikindo’s target

Automotive - 865,000 car sold throughout 2024 exceeding Gaikindo’s target The Indonesian Automotive Industry Association (Gaikindo) reported domestic car sales for 2024 at 865,723 units. This result declined by 13.9% yoy compared to 2023, which reached 1,005,802 units, but exceeded the target of more than 850,000 units previously set by the association. Gaikindo recorded wholesale car sales from all its members in December, reaching 79,806 units. This result is a 6.6 percent increase from November and allows Gaikindo to close the year according to target expectations. At the beginning of the year, Gaikindo set a target of 1.1 mn car sales for 2024, but in October it was revised to 850k units. Gaikindo reasoned that they wanted to be realistic in facing the sluggish domestic situation and the decline in people's purchasing power. Wholesale car sales from January to December 2024 dropped 13.9% yoy, while retail sales fell 10.9% yoy. The Japanese brand, Toyota, still dominates the market with wholesale figures of 288,982 units and retail figures of 293,788 units. Toyota controls 33.4 % of the market. (Source : Cnn Indonesia). Comment : FY24 witnessed automotive sales largely align with our projections. The sector achieved 865,723 units sold, representing approximately 98% of our forecasted 886,256 units. While precise figures are not provided by Gaikindo, overall car sales for the year surpassed Gaikindo's estimate of around 850,000 units. Looking ahead to FY25, a lower base effect is anticipated to drive sales growth. This positive trajectory is further supported by several key factors: a more favorable borrowing cost environment, the continued introduction of new models, EV acceleration development and sustained promotional efforts from dealers and leasing companies. However, the wait and see stance, a potential steady softer consumer spending and implementation of the Opsen tax in FY25 may present a headwind for the industry. Despite this potential challenge, we maintain an overweight stance on the automotive sector, with ASII as our preferred investment choice.