PT Astra International Tbk (ASII) plans to launch a new low cost green car (LCGC) model through its subsidiary, PT Toyota Astra Motor and PT Astra Daihatsu Motor, with brand names of Toyota Calya or Daihatsu Sigra in August 2016. According to the research by Indopremier Securities, LCGC is one of the company’s strategies to increase its market share of automotive and overcome the weakening purchasing power of consumers.
Seven-passenger cars will be sold at a price of Rp 100 million to Rp 120 million per unit to open a new segment that has been dominated by Toyota Avanza and Daihatsu Xenia. Based on the association data, Astra’s market share in March 2016 fell to 48% compared to March 2015 which amounted to 51%. But for LCGC sales, its market share increased to 59% by March 2016 compared to March 2015 by 56%.
Indopremier assesses that Toyota is able to realize these strategies so that Astra’s target to increase market share in volume in the period of industrial stagnation can be realized. Indopremier recommends holding Astra shares because the company still faces challenges of weak automotive sector and the decline in commodity prices. Management of the company will be cautious to maintain cash flow and a strong balance sheet. ASII’s revenue by the end of this year is estimated to reach Rp 183.22 trillion, down 0.52% compared to 2015 amounting to Rp 184.19 trillion. The company’s net profit in 2016 is predicted at Rp 17.78 trillion, up 22.95% from last year’s net profit of Rp 14.46 trillion. (*)
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