Frost & Sullivan Indonesia Automotive Outlook 2012

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Frost & Sullivan analysis on Indonesia's Automotive Outlook 2012 - presented by Vivek Vaidya, VP Automotive & Transportation Practice, Frost & Sullivan Asia Pacific at the 2012 Frost & Sullivan - Gaikindo Indonesia Automotive Outlook Media Briefing, January 18, 2012.

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Frost & Sullivan Indonesia Automotive Outlook 2012

  1. 1. Indonesia Automotive Outlook: 2012 Presented by Vivek VaidyaVice President of Automotive & Transportation Practice, Asia Pacific 18th January 2012
  2. 2. Contents Contents Indonesia Automotive Recap of 2011 Indonesia Automotive Outlook 2012
  3. 3. Global Light Vehicle Sales reached around 75 million in2011 a growth of 4% over 2010 Global Light Vehicle Sales: Global, 2009-2011 2009 2010 2011 35,000,000 30,000,000 25,000,000 20,000,000 15,000,000 10,000,000 5,000,000 0 North America South America Western Europe Eastern Europe Asia Middle East• Global light vehicle sales were up 4% in 2011 compared to 2010, the growth mainly contributed by emerging markets and US. EU sales were sluggish• Two natural disasters took toll on Automotive industry : Japan earthquake and Thailand floods. This will raise the questions on supply chain strategy for various vehicle manufacturers• Frost & Sullivan estimate global light vehicle sales to be approximately 78 million vehicles in 2012 due to continued concern about European debt crisis and its effect globally. 3
  4. 4. Brazil, Russia, India and China drove the growth alongwith US Light Vehicle Sales: Brazil, Russia, India and China, 2010-201120,000,000 2010 201116,000,00012,000,000 8,000,000 2.9% 2.9% 7.1% 26.5% 4,000,000 0 China Brazil India Russia• Russia has shown highest growth in 2011 as the economy recovers thanks to rising oil prices.• China sales were around 19 million vehicles which was approximately 25% of the global vehicle sales in 2011.• Chinese weak growth of just about 3 percent can be explained by excessive past demand and weak macroeconomic data.• Although, growth in India was impressive 7% in 2011, it appeared to be stagnating in later part of the year 4
  5. 5. Indonesia achieves no. 1 position among ASEAN countries for the firsttime Total Industry Volume (TIV), 2010 and 2011 890,410 764,710 800,357 800,300* 605,156 605,000 2010 2011 Indonesia Thailand Malaysia * - Estimate since the actual data is not released• Indonesia has overtaken Thailand as the largest automotive market in ASEAN region with yearly sales of around 890,400 units.• Floods in Thailand have further dented Thailand’s effort to recover and is likely to have same volume sales as 2010. 5
  6. 6. Indonesia : 2011 TIV likely to be around 890,000; 16.4% YOY growth Total Industry Volume (TIV), Indonesia (2009-2011) Drivers Total 483,548 764,710 890,410 (e) 58.1% 16.4% • Positive domestic economic environment • Postponement of subsidized fuel restriction 288,742 • Interest rate control (steady) 223,235 29.3% 79.8% • Increasing buying power from middle class segment 124,181 601,668 Restraints 541,475 359,367 50.7% 11.1% • Japan Tsunami (March 2011), Thai floods (Oct 2011) •Exchange rate volatility 2009 2010 2011 Passenger Vehicle Commercial Vehicle Monthly Sales Trend (2009 – 2011) 100,000 80,000 2009 60,000 Units 2010 40,000 2011 (f) 20,000 disruptions from Disruptions from recovery stage 0 Japan Tsunami Thai floods Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov DecSource: Gaikindo (2011ytd Nov) , Dec 2011 (Kompas retail data, analyzed); Analysis: Frost & Sullivan. Note: All figures are rounded. 6
  7. 7. Indonesia : 2011 passenger vehicle sales driven by growth in 4X2 segments primarily due to new models offered Passenger Vehicle Monthly Sales, Indonesia (2011) Passenger Vehicle Market Share Festivity 4X4 Japan Tsunami holidays Thai floods Sedan 0.9% 4.4% Festivity sales 100,000 70,000 Monthly sales by segments (units) 60,000 2011 4X2 Total Monthly Sales (Units) 50,000 10,000 4X2 40,000 94.6% Sedan 30,000 4X4 Sedan 0.7% 6.1% 1,000 20,000 4X4 10,000 2010 100 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 4X2 Total PV Sedan 4X2 4X4 93.2%Source: Gaikindo(2011 ytd Nov); Dec 2011 (Kompas retail data, analyzed); Analysis: Frost & Sullivan. Data is for Passenger Vehicles only Note: All figures are rounded. 7
  8. 8. Indonesia : Sedan segment seems to be losing ground as the volumesdeclined for the third year in a row Vehicle Segment 2010 Total Sales 2011 (f)Total Sales % growth (2010-2011) Sedan 33,128 26,712 -19.4% 4X2 504,510 569,274 12.8% 4X4 3,837 5,682 48.1% Total PV 541,475 601,668 11.1%• Low growth in sedan segment due to small numbers of new low sedan models and high preferences for other types such as MPV and compact city cars• Significant increase in 4X2 segment due to popular models such as MPV (Avanza, Xenia, Innova, Livina, APV), compact city car (Jazz, Yaris, Fiesta), minivan (Freed, Gran Max, Alphard), and SUV (CR-V, Rush, Terios, Fortuner, Pajero, Juke, Captiva)• 2011 also witnessed significant growth in 4X4 segment due to launching of numerous new models, either medium (Pajero Sport 4X4, Fortuner, Captiva) or luxury (Hummer, Jeep, Lexus & Toyota Land Cruiser) Source: Gaikindo (2011 ytd Nov); Dec 2011 (Kompas retail data, analyzed); Analysis: Frost & Sullivan. 8
  9. 9. Indonesia – commercial vehicle : Growth in Pick Up segment while there was a drop in bus segment Commercial Vehicle Monthly Sales, Malaysia (2011) Vehicle Segment % growth (2010-2011) Japan Tsunami Festivity sales Festivity 35,000Monthly sales by segments (units) holidays Bus -5.5% 30,000 Pickup/Truck 30.0% 25,000 Double Cab 29.6% Total CV 29.3% 20,000 Passenger Vehicle Market Share 15,000 Double Bus Double Bus Cab 1.4% Cab 1.9% 10,000 6.5% 6.5% 5,000 2011 2010 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Pickup Pickup /Truck /Truck Total CV Bus Pickup/Truck Double Cab 92.1% 91.6% Source: Gaikindo (2011 ytd Nov); Dec 2011 (Kompas retail data, analyzed); Analysis: Frost & Sullivan. Data is for commercial vehicles only Note: All figures are rounded. 9
  10. 10. Mitsubishi and Suzuki increased their market share in Indonesia Vehicle Market Share by OEMs (2009-2011) 486,342 543,594 539,800 7.6% 8.5% 9.3% Others • Toyota and Honda saw a market share drop, 3.2% 3.1% Isuzu due to the natural disasters in Japan at the 3.2% 4.4% 4.9% beginning of the year and Thailand at the end 6.5% Nissan 8.2% 8.0% of the year. 5.4% Honda 9.2% • Mitsubishi and Suzuki however managed to 9.3% 10.2% Suzuki increase its market share as compared to previous years due to launch of new models 12.8% 13.9% such as Mitsubishi Pajero and Suzuki Mega 14.6% Mitsubishi Carry respectively. 16.0% 15.5% • The Korean brands, Kia & Hyundai are slowly 15.4% Daihatsu gaining share, supported by their new SUVs and sedans with attractive features and value for money. • Nissan has also increased their share by 38.6% 36.7% 35.3% Toyota launching new models in 2011 such as Nissan New Grand Livina, Nissan Juke and Nissan Murano . Source: MAA (2011 ytd Nov); Dec 2011 (F&S forecast); Analysis: Frost & Sullivan. 2009 2010 2011 Data is for passenger vehicles only. Note: All figures are rounded 10
  11. 11. Healthy domestic led economic growth supported the automotivesector to increase its volumes GDP Growth Rates, 2008- 2011(f) Economic Activity Breakdown, 2011(f) Agriculture, 2008: 6.0% 2009: 4.6% 2010: 6.1% 2011(f): 6.5% 6.5% Livestock, Forestry Others and Fishery Mining and 3.7% 3.8% 3.5% 24.9% 15.6% Quarrying 3.4% 2.9% 2.9% 2.4% 2.8% 2.3% 11.6% 1.7% 1.9% 1.6% Trade, Hotel and Restaurant Manufacturing 13.8% 24.1% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Construction -1.4% 08 09 -2.4% 10 11 10.1% -3.6% • Indonesia witnessed GDP growth of approximately 6.5% in 2011 that was among the highest in Asia region. • Manufacturing contributed 24% of the economic activity which was quiet significant for increased growth in Indonesia.Source: MIER, BNM; Analysis: Frost & Sullivan 11
  12. 12. Some key launches in 2011 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Mitsubishi Toyota Grand Suzuki BMW Pajero Sport New Innova Mega Carry X1 Dakar Jul ‘11 Feb ’11 Oct ‘11 Apr ‘11 Daihatsu Honda New Audi New Sirion MercedesFull Size Accord A8 L Jul ‘11 E 300 Connect Feb ’11 Apr ‘11 Oct ‘11 Mazda8 Jul ‘11 Toyota All Nissan New Honda All New New Avanza Grand Livina Jazz (facelift) (Veloz) Feb ’11 May ‘11 Chevrolet Nov ‘11 New CaptivaNissan All New KIA All Jul ‘11 Daihatsu All Elgrand New Sportage Hyundai New Xenia Feb ‘11 May ‘11 Sonata Nov ‘11 Jul ‘11 Hyundai Mercedes Benz BMW H1 (facelift) ML300 KIA All New 116i Mar ‘11 May ‘11 Picanto Nov ‘11 Jul ‘11 BWM Nissan Nissan KIA 520d Juke Murano All New Rio Mar ‘11 Jun ‘11 Sep ‘11 Dec ‘11 12
  13. 13. Contents Contents Indonesia Automotive Recap of 2011 Indonesia Automotive Outlook 2012
  14. 14. Economic Outlook 2012 : Stable economic growth of more than6% 15.0% Economic Growth Rate, 2009 - 2012 Real GDP Agriculture 10.0% Mining 5.0% Manufacturing Construction 0.0% Trade, Hotel, & Restaurant 2009 2010 2011(f) 2012(f) -5.0% Others • The GDP growth for 2012 is expected at around 6.3%. Main outcome would be coming Real GDP from high domestic consumption as the middle class segment is growing. Others are due to high investment rate to various industry sectors and infrastructure. • Manufacturing sector slightly growing is projected at ±6.1%, due to support from Manufacturing government in infrastructure and facilities development, also investment support; but should as well consider the continuing global economic crisis condition • Construction sector is projected to be growing at more than 6.8% as the government are planning on accelerating main infrastructures development such as road, railway, Construction highways, ports, airport, and also from other supporting constructions (power plants, manufacturing plant expansion, etc) 14
  15. 15. In 2012, Frost & Sullivan projects a TIV of 948,500, as the economy ispredicted to grow stable and increase the consumers buying power Total Industry Volume, 2011-2012 Key Factors Impact (Indonesia) • Likely to be stable at around 6.4% despite TIV : 948,500 Economy the global economic downturn, due to TIV : 890,410 growth growing infrastructure and industry development Commercial Commercial Vehicles Subsidized • Restriction regulation on subsidized fuel is Vehicles 7.5% 310,500 fuel planned to take effective by April 2012 288,742 restriction Buying • Growing of middle segment will increase the buying power of vehicle products, power especially low cost vehicles Passenger Passenger Vehicles Vehicles 6.0% 638,000 Interest rate • Government has to sustain a low interest 601,668 rate to support the growth of business control and industry High • Numbers of automotive principals have decided to put more investment on investment network expansion and increasing 2011* 2012 (f) rate production capacity 15
  16. 16. 2012 TIV will be driven by 4X2 segment with 6.5% growth in thesegment Total Industry Volumes by Vehicle Segments, 2011 and 2012 • 4X2 segment will remain the biggest TIV : 638,000 segment with 6.5% growth, driven by key model launches: Suzuki Ertiga to 4X4 12.3% Passenger Vehicles 6,380 TIV : 601,668 compete with the new launched duo 25,520 Sedan -4.5% MPV Avanza and Xenia and Nissan new 5,682 minivan; few SUV model launches such 26,712 as All new CR-V; and few other compact 606,100 4X2 6.5% city car models 569,274 • Sedan will probably slightly decline as consumers preferences are higher towards SUV and compact city cars 2011* 2012 (f) TIV : 310,500 • 4X4 segment will also grow due to some popular models like Pajero, Ford Ranger Commercial Vehicles 4,036 Bus 2.3% TIV : 288,742 Double and few premium branded models 20,183 8.1% Cab • Pickup and Truck segment will still 3,947 experience significant growth as the 18,670 industry sectors are expected to grow Pickup 7.6% 286,281 /Truck well 266,125 • Double cab has an increased popularity as premium lifestyle vehicles as well its 2011* 2012 (f) function for commercial purposes. 16
  17. 17. New launches supporting the growth in 20122012 will witness the launch/facelift of around 25-30 new models in Indonesia that willfurther increase the sales volumes growth.Japanese OEMs mainly Toyota, Honda and Suzuki are likely to be the front runners interms of new model introduction by launching close to 15-20 models in 2012.Ford, Hyundai, Proton and BMW are the other OEMs that are each likely to introducemore than 2-3 new models and make their mark in Indonesia automotive market in2012. 17
  18. 18. Can Indonesia hit 1 million automotive sales in 2012? Factors that will impact Indonesia to hit 1 million mark in 2012 • European debt crisis to be • Competition from Korean resolved and more confidence and Chinese OEMs in in the global economy Indonesia that will further have an impact on price competitiveness. Favourable Increased global competition situation Favorable Low cost domestic eco car policies • Fuel subsidy restriction not to •Introduction of low cost be implemented in 2012 that cars in Indonesia that will will increase confidence among allow motorcycle users to buyers. enter the car market. 18
  19. 19. Conclusions2011 was another tremendous year for Indonesia automotive industry as itexperienced more than 16% growth despite of the global economic downturn andnatural disasters that hit Japan and Thailand2012 Indonesia Automotive TIV is expected to still grow at a moderate increase of 6.5%with support from stable economic condition and ever increasing consumer buyingpowerConsumer preferences on passenger vehicles will still high for 4X2 segments especiallythe MPV, SUV and compact city cars models; while for commercial vehicles the doublecab will have an increasing popularity over common pickup modelsIf the global economic environment turns favorable and domestic policy support isstrong, Indonesia may cross the magical 1 million unit sales. At this stage the possibilitylooks quite low. 19

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