Jakarta. For the first time in 14 years, the best selling car in Indonesia is not Toyota's.
The manufacturer's most popular multi-purpose vehicle Avanza is now behind Expander, which was introduced by Mitsubishi last year. Just slightly more expensive, the rival comes with more features. Its fresher design appeals to customers looking for an Avanza replacement, as the old model's body has changed little in the past few years.
Mitsubishi sold 21,972 Expander cars in the first quarter this year, which is 559 more than the sales of Avanza.
Toyota's another rival comes from China. Wuling Motor sells well-equipped cars that erode Toyota's standing among first-time car owners.
Toyota dealer, Astra International, the sixth largest company by market capitalization, reported a 2 percent decline in net income in the first quarter to Rp 4.9 trillion ($353.54 million). Car sales, accounting for 43 percent of the company's revenue, dropped by 12 percent, compared with the same period last year.
Astra's shares have also been affected. On Friday (27/04) they traded at Rp 7,225 a piece, the lowest since July 2016, and by 21 percent cheaper than their all-time high of Rp 9,150 a year ago.
"We see that the first quarter is not a benchmark for the whole year, so we do not need a revision of Astra's targeted shares price. We see they are still on the track," Kiswoyo Adi Joe, a senior researcher at asset management firm Narada Kapital Indonesia told the Jakarta Globe.
Kiswoyo said a slight decline in Astra's performance in the first quarter this year would be compensated by its diversified businesses in the heavy equipment, mining and construction sectors.
Astra's heavy machinery unit's performance is excellent. Operated by United Tractors, it recorded a 69 percent increase in its net income to Rp 2.5 trillion in the first quarter.
"Between 2015 and 2016, the automotive business was compensating Astra's other sluggish businesses amid weak commodity prices, but now, when the automotive business is down, other business units — coal and construction — will help the company's overall performance throughout the year," said Kiswoyo.
He said in the past years, Astra has diversified its business by investing in property, construction, technology and especially in homegrown ride-hailing service provider Go-Jek.
The company is also developing a residential apartment project in Central Jakarta and participates in the construction of a 363-kilometer section of the Trans Java Toll Road, which is set for completion next year.
"We will see the fruits of their investment by the end of this year or in 2019," Kiswoyo said, adding that he believes Astra's shares could reach about Rp 10,000 a piece by the end of the year.
Binaartha Sekuritas analyst Reza Priyambada echoed Kiswoyo's views, saying that he also will not revise the target stock price for Astra, as the company's performance will improve in the third quarter this year, because automotive sales will be boosted around the end of the fasting month of Ramadhan in June.
New Models, Export Destinations
To anticipate sluggish sales amid a weak rupiah, Astra has been using domestic components in its cars to reduce dependence on imports.
"The weak rupiah is indeed affecting our performance, but we have been anticipating this for many years by gradually increasing the use of our domestic components ... Now, 95 percent of our motorcycle parts are produced domestically," Astra International president director Prijono told reporters on Wednesday.
Astra plans to launch at least six new car models this year, including sports utility vehicle (SUV) Toyota C-HR and second generation Toyota Rush with a new design.
Astra International independent director Djoni Bunarto Tjondro said he expects exports to the company's new markets will increase this year.
Astra previously reported plans to add Laos, Myanmar, Peru, Chile, Argentina and Brazil to its export destinations.
The company expects the exports will grow by 10 percent from about 199,160 car units last year.
Astra, which accounts for about a third of Indonesia's motorcycle sales, projects that this year the sales will reach about 4.5 million units, up 2.7 percent from the previous year.
David Budion, production, engineering and procurement director at Astra Honda Motor, said the motorcycle sales will pick up with this year's improvement in the prices of coal and palm oil.
"Automatic motorcycles will be a trending this year. We are now exploring whether retro-style motorcycles can be a thing in the coming years," he said.