Indonesia Automotive Outlook: 2013Indonesia Automotive Outlook: 2013

Presented byPresented by

Vivek VaidyaVivek VaidyaVivek VaidyaVivek Vaidya

Vice President of Automotive & Transportation Practice, Asia PacificVice President of Automotive & Transportation Practice, Asia Pacific

1717thth January 2013January 2013

CONTENTS

Indonesia Automotive Recap of 2012

Indonesia Automotive Outlook 2013

2

Indonesia hit the 1 million unit volume the first time in the history

894.164

1.116.000

794.081

1.450.000

600.123 618.000

Total Industry Volume (TIV), 2011 and 2012

3 3

2011 2012 (f)

Indonesia Thailand Malaysia

• Indonesia surpassed 1-million unit sales and important landmark to gain importance globally

• Thailand regained number 1 position, 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, Gaikindo, MAA, TAIA (2012 ytd Nov), Frost & Sullivan Analysis. Note: All figures are rounded.

541.475 601.945780.500

223.235292.218

335.500

2010 2011 2012 (f)

Indonesia : Growth in 2012 supported by strong economic factors, successful

new model launches and postponement of fuel price increase

764,710 894,164 1,116,000 (e) • 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

11.2% 14.6%

30.9%

16.9%

29.6%

24.7%Total

• Increment on down payment minimum rate

• Partial restriction of subsidized fuel to CV segment

• Slowing down of export commodities and mining

Restraints

DriversTotal Industry Volume (TIV), Indonesia (2010-2012)

4

2010 2011 2012 (f)

Passenger Vehicle Commercial Vehicle

0

20.000

40.000

60.000

80.000

100.000

120.000

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Un

its

Monthly Sales Trend (2010 – 2012)

2010

2011

2012

4

Source: Gaikindo (2012 ytd Nov), Frost & Sullivan Analysis. Note: All figures are rounded.

• Slowing down of export commodities and mining

industry

Sedan

4,4%

4X2

4X4

1,0%

2012

Indonesia : MPV and Hatchback (4X2) remained the largest segment, segment

shares virtually unchanged from 2011

50.000

60.000

70.000

80.000

10.000

100.000

Tota

l M

on

thly

Sa

les

(Un

its)

Mo

nth

ly s

ale

s b

y s

eg

me

nts

(u

nit

s)

Passenger Vehicle Monthly Sales, Indonesia (2012)

Festivity

holidaysEnforcement of

higher minimum

down payment

Indonesia Int’l

Motor Show 2012

4 X 2

Passenger Vehicle Market Share

5

4X2

94,6%

Sedan

4,5%

4X2

94,6%

4X4

0,9%

20110

10.000

20.000

30.000

40.000

50.000

100

1.000

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Tota

l M

on

thly

Sa

les

(Un

its)

Mo

nth

ly s

ale

s b

y s

eg

me

nts

(u

nit

s)

Total PV Sedan 4X2 4X4

5

Source: Gaikindo(2012 ytd Nov), Frost & Sullivan analysis. Data is for Passenger Vehicles only. Note: All figures are rounded.

4 X 4

Sedan

Indonesia : Growth rate in each segment was spectacular, with highest

volume growth in 4X2 segment

Vehicle Segment 2011 Total Sales 2012(f) Total Sales % growth (2011-2012)

Sedan 26,622 34,100 28.1%

4X2 569,802 738,600 29.6%

4X4 5,521 7,800 41.3%

Total PV 601,945 780,500 29.1%

Passenger Vehicle Segment sales – Indonesia, 2011 – 2012(f)

6 6

• 4X2 and 4X4 segments – successful model launches drove the segment volumes

• New models : Suzuki Ertiga, Nissan Evalia, Chevrolet Spin, Honda Brio

• Upgrades : Toyota Avanza, Daihatsu Xenia, Honda CR-V etc.

• Sedan segment recovered from last year drop as the part supply from Thailand and Japan

recovered, boosting sales of low and medium sedan category (alike of Vios, City, Civic and Camry)

Source: Gaikindo (2012 ytd Nov), Frost & Sullivan analysis.

20.000

25.000

30.000

35.000

Mo

nth

ly s

ale

s b

y s

eg

me

nts

(u

nit

s)

Commercial Vehicle Monthly Sales, Indonesia (2012)

Indonesia – commercial vehicle : Pickup and truck sales growth supported by

manufacturing and retail sectors

Vehicle Segment % growth (2011-2012)

Bus 2.4%

Pickup/Truck 15.4%

Double Cab 8.3%

Total CV 14.8%

Passenger Vehicle Market Share

Festivity

holidays

Export and some

industry slowing

down

7

0

5.000

10.000

15.000

20.000

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Mo

nth

ly s

ale

s b

y s

eg

me

nts

(u

nit

s)

Total CV Bus Pickup/Truck Double Cab

Bus

1,3%

Pickup/

Truck

93,0%

Double

Cab

5,7%

2012

Bus

1,4%

Pickup

/Truck

92,5%

Double

Cab

6,1%

2011

7

Source: Gaikindo (2012 ytd Nov), Frost & Sullivan analysis. Data is for commercial vehicles only Note: All figures are rounded.

Passenger Vehicle Market Share

Toyota, Suzuki and Honda gain market shares while Mitsubishi and Daihatsu

lose market share despite volume growth

13,9% 15,0% 13,3%

9,3% 10,6% 11,3%

8,0% 5,1% 6,2%

4,9% 6,3% 6,0%

3,1% 3,2% 3,0%

8,5% 9,5% 9,2%

Vehicle Market Share by OEMs (2010-2012)

Suzuki

Honda

Nissan

Isuzu

Others

1,116,000 (f)764,710 894,164• 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%

8

36,7% 34,7% 36,3%

15,5% 15,6% 14,6%

13,9% 15,0% 13,3%

2010 2011 2012

8

Toyota

Daihatsu

Mitsubishi• Suzuki gains 1.1% market share with the high

sales of its new MPV model Ertiga.

• Honda gains 1% share due to strong showing

of Brio and new CR-V

• Mitsubishi, in the other hand, has lost 1.5%

market share.

• Mitsubishi may decide to focus on passenger

car segment a lot more to reverse the trend

in 2013

Source: various media (2012 ytd Nov) Frost & Sullivan analysis. Note: All figures are rounded

Healthy domestic led economic growth supported the automotive sector to

increase its volumes

1,7%2,3%

3,8%

1,9%

2,9%3,4%

-1,4%

1,6%

2,9%3,5%

-1,3%

1,4%

2,8%3,2%

Q1

'09

Q2 Q3 Q4 Q1

'10

Q2 Q3 Q4 Q1

'11

Q2 Q3 Q4 Q1

'12

Q2 Q3 Q4

GDP Growth Rates, 2009- 2012(f)

2009: 4.6% 2010: 6.2% 2011: 6.5% 2012(f): 6.2%

9 9

-2,4%

-1,4% -1,3%

Agriculture,

Livestock,

Forestry and

Fishery

15,1%

Mining and

Quarrying

12,1%

Manufacturing

23,7%

Construction

10,3%

Trade, Hotel

and Restaurant

13,7%

Others

25,1%

Economic Activity Breakdown, 2012(f)

Source: Central Bureau of Statistic (2012 ytd Q3); Analysis: Frost & Sullivan

• 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; construction sector saw

high growth in 2012

Model launches in 2012: most covering the biggest segment 4x2 with various

body type – MPV, city car, SUV

Suzuki

Ertiga

Toyota

Nav1

Mazda

MPV & SUV (~12 new models) Sedan & City Cars (~7) CV

Honda

All New CR-V

Volkswagen

Mitsubishi

Outlander

Toyota

All New Camry

Honda

All New Civic

Suzuki

All New Swift Chevrolet

Suzuki

Mega Carry

Extra

Mazda

New BT-50

10

Mazda

Biante

Nissan

Evalia

Chevrolet

Spin

Volkswagen

New Caravelle

Volkswagen

New Touareg

Audi

Q3

Hyundai

New Santa Fe

Suzuki

New Grand

Vitara (facelift)

Mitsubishi

Mirage

Ford

All New Focus

Peugeot

208

Honda

Brio

Chevrolet

All New

Colorado

Ford

New Ranger

Isuzu

Giga F-series

CONTENTS

Indonesia Automotive Recap of 2012

Indonesia Automotive Outlook 2013

11

0,0%

5,0%

10,0%

2010 2011 2012 (f) 2013 (f)

Real GDP

Agriculture

Mining

Manufacturing

Construction

Trade, Hotel, & Restaurant

Others

Economic Outlook 2013 : GDP growth expected to be about 6% fuelled by

domestic consumption

Economic Growth Rate, 2009 – 2012 (f)

12

2010 2011 2012 (f) 2013 (f)

12

• GDP growth is expected to remain stable around 5 – 6%

• Will rely strongly on domestic economy and the inflowing investmentReal GDPReal GDP

• Still the biggest contributing sector

• Shall see some growth with the condition of realization happening in 2013 from potential investment

ManufacturingManufacturing

• With the growing domestic economy, the possibly growing sectors would be the sectors contributing much to the domestic economy, likely will be constructions; agriculture, livestock, forestry & fishery; electricity, gas and water supply

Growing sectors

Growing sectors

ASEAN Economic Community (AEC) initiative is likely to benefit Indonesia

Areas Level Impact

SalesLargest market in ASEAN. The high growth phase is expected to continue. AEC will not

be impacting growth as such.

ProductionThe local manufacturing is likely to see a big jump as Indonesia becomes more

attractive as a regional hub for production

13

Market ConcentrationIncrease in competitive activity as Indonesia becomes more attractive in terms of a

large market, lower costs and regional access

Retail NetworkIncrease in number of dealers as new players enter the market and tackle the

geographic complexity of the market

Vehicle ExportsExports are likely to grow as AEC and FTAs will make it easier for OEMs to set up base

and supply to other markets

Supplier BaseThe 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

Indonesia Auto 2013: Economic-driven marketIndonesia 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. They have driven the market previously, and still will drive the market on 2013 onwards.

• Positive growing economy, has been above 6%, and predicted to be still at least 6% for 2013

• Stable inflation, exchange rate, lending rateGood economy

• Some minor issues from regulations arising and corruption cases; but so far have not been impacting much to automotive and the market

• Anticipation in 2013 for 2014 general electionStable politics

14

• Along better economy, arising the population of middle class, supported by huge young population

• Indonesia is predicted to have golden productivity period up to 2025; which will create more potential middle classes

Growing middle class

Increasing income level

• Indonesia’s growing economy is still very attractive for more investment

• Automotive sector investment reach 70% growth rate, valued more than US$ 1.3 billion as of 3rd quarter of 2012

• 2013 investment flow is expected to still grow around 30%

Continuous investment

flow

• Proven by increasing domestic consumption

• 2013 economy may as well strongly rely to its high domestic consumption

Indonesia Auto 2013: 6 key factors would impact growth in 2013

• The official announcement of the program might boost the market as there will be more affordable vehicles as options

LEC-LCGC Program

• Official electricity tariffs increment taken place

• Options of restriction or price increment on fuelRollback of subsidies

• Ever-high increment on minimum labor wages might impact the production cost of supplying industry

Increasing standard labor minimum wages

15 15

supplying industrylabor minimum wages

• Enforcement of minimum down payment to sharia financing by April 2013 will limit finance options to marketVehicle financing policy

• Increment of higher standard to Euro3 or 4 might need procedural cost, impacting to higher vehicle selling price

Emission standard

• Possible increment on tax: title transfer fee, progressive tax or luxury tax �increasing ownership cost

Increasing vehicle tax rate

Commercial Vehicles

335.500

Commercial Vehicles

360.000

Total Industry Volume, 2012-2013 (Indonesia)

Frost & Sullivan projects TIV to reach 1.2 million with 7.5% growth rate

7.3%

TIV :

1,116,000

TIV :

1,200,000

16

Passenger Vehicles

780.500

Passenger Vehicles

840.000

335.500

2012 2013 (f)

16

7.6%

7.3%

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

17

• Timely implementation of LCE-LCGC program

Negative Factors

• Minimal impact of roll back of fuel subsidy and vehicle finance policy

• Uncertainties in global economy

Passenger Vehicles would continue to grow to reach 840,000 units in 2013

Total Industry Volumes by Vehicle Segments, 2012 and 2013

Passenger vehicles :

780,500

Passenger Vehicles :

840,000

4X2Pa

sse

ng

er

Ve

hic

les

Sedan

4X4

10%

7%

7%

18

2012 2013 (f)

18

• 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.

• 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

Commercial Vehicles market size would touch 360,000 in 2013

Total Industry Volumes by Vehicle Segments, 2012 and 2013

7%

8%

Co

mm

erc

ial

Ve

hic

les

Pickup

Double Cab

Bus 6%

Commercial Vehicle :

355,500

Commercial Vehicles

: 360,000

19

2012 2013 (f)

19

7%

• 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

Pickup/Truck

Conclusions

Indonesian Automotive market beat the predictions to reach 1 million units in 2012

Indonesia automotive 2013 will likely go up slow to 1.2 million units if economic conditions remain stable, investment flow and infrastructure

20 20

Indonesia automotive 2013 will likely go up slow to 1.2 million units if economic conditions remain stable, investment flow and infrastructure continues, there is timely announcement of LEC-LCGC program and impact of fuel subsidy roll back and vehicle financing policy is minimal

However, stringent policies such as fuel subsidy roll back, vehicle financing are implemented or if there is slowdown in global economic conditions volumes may decline and slip below 1 million units in 2013