Credit Suisse: February auto data was simply robust, despite the low-base effect

● Indonesia’s February auto data was simply robust. Car volumes jumped 61% YoY (+5% MoM) to a 17-month high of 55,656 units and motorcycle volumes rose 29% YoY (+7% MoM). YTD, car volumes were up 64% YoY while motorcyle volumes were up 33% YoY. Although partly due to the low-base effect, the current monthly run rate for cars is around 5% higher than our forecasts, while motorcycles’ run rate is relatively in line.
● We believe the return of financing market, consumer confidence, and lower interest rates continue to be the key reasons behind the strong performance. The expectation of higher auto prices due to the possible new (higher) tax could also be a factor.
● Astra’s car market share stayed dominant at 56% in February 2010, while its motorcycle share recovered slightly MoM to 45%. We expect competition in motorcycle industry to remain tight.
● We maintain our OUTPERFORM rating on Astra and continue to see it as a core holding in the Indonesia market, given its strong domestic position and solid management. TP Rp43,400.