We maintain a neutral outlook for the auto sector. FY24 sales reached the lowest level since 2011 (excluding the levels after COVID outbreak) at 865k units. Indonesia autos sector faces an overhang due to the implementation of the opsen tax. Opsen tax refers to additional tax for both 4W and 2W vehicles to boost the regional government’s revenue.
Our industry survey indicates YTD January 2025 sales have been weak for the 4W market given the front-loaded surge in December 2024 sales. Meanwhile, 2W sales appear resilient on the back of downtrading trends; however, growth is likely to remain flat in 2025. Upside risks include potential policy support, while downside risks relate to weakening purchasing power and increasing competition in low-cost vehicles.
Opsen tax – likely delayed for most provinces but still an overhang
One latent risk in the automotive sector is the opsen tax (see here and here). According to Law 1/22 and Government Regulation 35/2023, Opsen tax gives room for local governments to impose additional taxes in the form of a percentage of the existing tax. In detail, this allows changes in BBNKB (Motor Vehicle Title Transfer Fee) to increase by up to 66% and PKB (Annual Vehicle Tax) to decrease to 1.2% (from 2%), which falls to consumers. This tax would need to translate into price increases by c. 5-10%, we believe, and that would affect sales volumes. Our sensitivity analysis indicates that for every 1% increase in price, there could be a corresponding decline of 1.4% in 4W sales volumes – assuming other factors remain stagnant. Electric vehicles (EVs) are exempt from the Opsen tax, with existing incentives for both BBNKB and PKB remaining at 0%.
The government had planned to roll out the opsen tax by 5 January 2025. However, our industry survey indicates that the enforcement varies in each province. Some provinces such as West Java and Tangerang have postponed enforcement, while others, such as North Sulawesi, have already implemented the tax. According to a media report, 25 provinces have delayed the implementation indefinitely. We consider this uncertainty to be a key overhang for the sector and may weigh on growth in 2025F.
Weakest 4W annual sales since 2011 – some regions are increasing the price due to opsen tax
Indonesia’s 4W market recorded its weakest annual performance since 2011, with total wholesales falling to 865k units in FY24 from 1mn units in FY23, and retail sales declining to 889k units from 998k units in FY23. The year ended on a high note, with December 2024 marking the best month of the year at 80k wholesales and 82k retail sales due to front-loaded purchases ahead of the January 2025 opsen tax implementation.
While the overall slowdown was indeed broad, the electric vehicle segment kept the growth strong: 43k EV units were sold in 2024 vs. 17k in 2023, driving the EV penetration to 4.9% of total 4W sales from 1.7% in 2023. However, in December 2024, EV sales sharply contracted to 3.9k units from the peak of 6k units in November, underlining the volatility in this emerging segment. But, currently accelerated EV adoption remains only a small percentage of the whole 4W market and will be insufficient to replace lost sales volume on conventional automobiles.
2W segment resilient amid downtrading
The 2W market appears to have been resilient on the back of domestic and export demand. Domestic 2W sales stood at 6,333k units in FY24 vs. 6,230k units in FY23, on the back of stable demand amidst the economic downturn. Exports were similarly resilient at 573k units in FY24, up marginally from 570k units in the previous year, largely driven by downtrading trends, wherein price-sensitive consumers settle for more affordable products at the expense of premium ones. Notwithstanding the preceding factors, 2W segment growth in 2025 should be flat due to constrained purchasing power, thereby limiting further expansion possibilities, in our view.
Valuation and risks
We believe some of the sector players are in a strategic position to benefit from the shift of demand in the market
•Adi Sarana Armada (ASSA IJ, Buy): Benefiting from increasing activity in the used car market as consumers shift from new to secondhand vehicles.
•Astra Otoparts (AUTO IJ, BuY): Poised for growth in demand for spare parts due to the increase in maintenance for ageing vehicles.
•Dharma Polimetal (DRMA IJ, Buy): Utilizes its EV component manufacturing capabilities to benefit from the rapidly growing market segment.
•Mitra Pinasthika Mustika (MPMX IJ, Buy): Capturing ongoing demand for high-end motorcycles and stable 2W sales.
Upside risks include fiscal stimulus/tax incentives that could improve affordability and, therefore, demand, while downside risks are related to further headwinds from macro, softening consumer confidence, and increased low-end competition.
Fig. 1: FY24- Total value, wholesales, and ASP. Auto market declined by -9.2% predominantly due to lower volume. ASP up by 5.6%
Source: Gaikindo, Verdhana research
Fig. 2: 4W wholesales
4W wholesales (k)
Nov-23
Dec-23
Nov-24
Dec-24
mom%
yoy%
FY23
FY24
yoy%
Wholesales
84
85
74
80
7.3%
-6.4%
1,006
865
-14%
Astra
47
48
39
42
7.0%
-12%
561
483
-14%
Toyota
31
32
27
27
-1.2%
-17%
337
289
-14%
Daihatsu
14
13
10
13
30%
2.0%
188
163
-13%
Isuzu
2.4
2.4
2.0
2.2
5.7%
-10%
31
26
-16%
Others
0.4
0.4
0.4
0.3
-22%
-33%
4.5
4.6
1.3%
Ex-Astra
37
38
35
38
7.8%
0.1%
445
382
-14%
Mitsubishi
9.2
9.1
8.3
9.4
13%
3.0%
109
100
-8.3%
Honda
11
8.4
8.4
8.4
-0.1%
-0.4%
139
95
-32%
Suzuki
7.1
7.4
5.6
6.7
20%
-9.2%
81
67
-18%
Wuling
2.7
4.2
2.6
3.3
28%
-23%
24
22
-6.9%
Hyundai
3.1
2.9
1.7
1.8
11%
-37%
36
22
-37%
Neta
0.1
0.1
0.1
0.1
-3.8%
58%
0.2
0.8
na.
MG
0.1
0.1
0.2
0.1
-27%
36%
1.2
4.0
na.
Chery
0.2
0.3
0.9
1.4
70%
na.
4.1
9.2
124%
Citroen
-
-
0.1
0.1
-4.8%
na.
-
1.3
na.
BYD
-
-
2.8
1.6
-45%
na.
-
15
na.
Others
4.1
5.1
4.3
4.6
9.2%
-8.5%
52
45
-12%
Domestic mkt share %
Nov-23
Dec-23
Nov-24
Dec-24
FY23
FY24
Astra
56%
56%
53%
53%
56%
56%
Toyota
37%
38%
36%
33%
33%
33%
Daihatsu
16%
15%
13%
16%
19%
19%
Isuzu
2.8%
2.8%
2.7%
2.7%
3.1%
3.1%
Others
0.4%
0.5%
0.5%
0.3%
0.4%
0.5%
Ex-Astra
44%
44%
47%
47%
44%
44%
Mitsubishi
10.9%
10.7%
11%
12%
11%
12%
Honda
13%
10%
11%
11%
14%
11%
Suzuki
8.4%
8.7%
7.5%
8.4%
8.1%
7.7%
Wuling
3.2%
4.9%
3.4%
4.1%
2.3%
2.5%
Hyundai
3.6%
3.4%
2.2%
2.3%
3.5%
2.6%
Neta
0.1%
0.1%
0.2%
0.2%
0.0%
0.1%
MG
0.1%
0.1%
0.2%
0.2%
0.1%
0.5%
Chery
0.2%
0.3%
1.1%
1.8%
0.4%
1.1%
Citroen
0.0%
0.0%
0.2%
0.2%
0.0%
0.2%
BYD
0.0%
0.0%
3.8%
2.0%
0.0%
1.8%
Others
4.9%
6.0%
5.7%
5.8%
5.1%
5.2%
Source: Gaikindo, Verdhana research
Fig. 3: 4W wholesales, market share (%) per brand
Source: Gaikindo, Verdhana research
Fig. 4: 4W retail sales
4W retail sales (RS, k)
Nov-23
Dec-23
Nov-24
Dec-24
mom%
yoy%
FY23
FY24
yoy%
Retail sales
83
90
76
82
7.9%
-8.4%
998
889
-11%
Astra
47
49
41
42
3.3%
-14%
555
495
-11%
Toyota + Lexus
29
31
26
26
-1.4%
-17%
325
294
-9.7%
Daihatsu
15
15
12
13
9.0%
-12%
194
168
-13%
Isuzu
2.6
2.8
2.5
3.0
21%
5.7%
32
29
-9.0%
Others
0.4
0.4
0.3
0.4
34%
2.7%
4.3
4.7
8.0%
Ex-Astra
36
41
35
40
13%
-1.1%
443
393
-11%
Mitsubishi
9
10
8.5
9.7
15%
-1.0%
115
98
-15%
Honda
10
11
8.8
10.7
22%
-4.6%
128
103
-20%
Suzuki
6.5
8.1
6.2
6.9
10%
-15%
82
69
-16%
Wuling
2.2
3.4
2.5
2.8
11%
-18%
26
25
-3.6%
Hyundai
3.1
3.1
1.7
1.6
-5.9%
-49%
36
22
-38%
Neta
0.1
0.1
0.1
0.1
29%
41%
0.2
0.6
na.
MG
0.1
0.1
0.3
0.2
-33%
66%
1.2
4.1
na.
Chery
0.2
0.3
0.8
1.1
39%
na.
4.0
8.6
118%
Citroen
-
-
0.1
0.1
-11%
na.
-
0.9
na.
BYD
-
-
2.8
2.3
-18%
na.
-
14
na.
Others
4.3
4.4
3.6
4.6
27%
4.5%
50
47
-5.9%
Retail mkt share %
Nov-23
Dec-23
Nov-24
Dec-24
FY23
FY24
Astra
57%
55%
54%
51%
56%
56%
Toyota
35%
34%
34%
31%
33%
33%
Daihatsu
18%
17%
16%
16%
19%
19%
Isuzu
3.1%
3.1%
3.2%
3.6%
3.2%
3.2%
Others
0.5%
0.4%
0.4%
0.5%
0.4%
0.5%
Ex-Astra
43%
45%
46%
49%
44%
44%
Mitsubishi
11.2%
11.0%
11%
12%
12%
11%
Honda
12%
13%
12%
13%
13%
12%
Suzuki
7.8%
9.1%
8.2%
8.4%
8.2%
7.8%
Wuling
2.7%
3.8%
3.3%
3.4%
2.6%
2.8%
Hyundai
3.7%
3.4%
2.2%
1.9%
3.6%
2.5%
Neta
0.1%
0.1%
0.1%
0.1%
0.0%
0.1%
MG
0.1%
0.1%
0.3%
0.2%
0.1%
0.5%
Chery
0.3%
0.3%
1.1%
1.4%
0.4%
1.0%
Citroen
0.0%
0.0%
0.2%
0.1%
0.0%
0.1%
BYD
0.0%
0.0%
3.7%
2.8%
0.0%
1.6%
Others
5.2%
4.9%
4.8%
5.6%
5.0%
5.3%
Source: Verdhana estimates
Fig. 5: 4W retail sales, market share (%) per brand
Source: Company data, Verdhana research
Fig. 6: 2W retail sales
2W market (k units)
Nov-23
Dec-23
Nov-24
Dec-24
mom%
yoy%
FY23
FY24
yoy%
Domestic
572
427
513
403
-21%
-5.5%
6,230
6,333
1.7%
Export
46
43
59
56
-5.7%
30%
570
573
0.4%
Total
618
470
572
459
-20%
-2.3%
6,800
6,906
1.6%
Source: AISI, Verdhana research
Fig. 8: EV sales surge as ASP drops: Affordable models drive adoption
Source: Company data, Verdhana research
Fig. 9: EV market share by brand and model – BYD M6 gained strong traction
Source: Gaikindo, Verdhana research
Fig. 10: Incremental impact of Opsen tax on vehicle tax rates by province
Province
Total Regional Vehicle Tax
Increment
UU 28/2009 (BBNKB + PKB)
UU 01/2022 (BBNKB + PKB + Opsen)
DKI Jakarta
14.5%
14.5%
0%
West Java
14.3%
21.8%
52%
East Java
16.5%
21.9%
33%
Banten
14.3%
21.9%
53%
Central Java
14.0%
18.3%
31%
North Sumatra
11.8%
18.3%
55%
East Kalimantan
16.8%
14.6%
-13%
South Kalimantan
11.5%
13.3%
16%
Riau
11.5%
18.3%
59%
Bali
18.0%
21.9%
22%
South Sumatra
14.0%
18.3%
31%
West Kalimantan
14.0%
18.4%
31%
South Kalimantan
11.5%
21.9%
90%
Lampung
16.5%
18.3%
11%
Kepulauan Riau
11.5%
18.3%
59%
Source: Detik, Gridoto, Regional Province website, Verdhana research
Fig. 11: Scenarios for Opsen tax impact on 4W’s on-the-road (OTR) price
Scenarios - opsen tax (4W)
Rp mn
4W on-the-road (OTR) price Rp mn
300
%
BBNKB (Motor Vehicle Transfer Tax) rate
12.5%
Rp mn
BBNKB (Motor Vehicle Transfer Tax) rate
38
%
BBNKB new rate - Opsen
16.6%
Rp mn
BBNKB new rate - Opsen
50
%
VAT old
11.0%
Rp mn
VAT paid
33
%
VAT new
12.0%
Rp mn
VAT new
36
Rp mn
Car price after opsen
315
%
Price increase %
5.1%
Rp mn
Before - PKB (Annual vehicle tax)
3.2
%
Tax rate
1.1%
Rp mn
+ Opsen tax (66% of PKB)
2.1
Rp mn
After - PKB
5.2
Source: Company data, Verdhana research
Fig. 12: Impact of Opsen tax on 4W prices and annual tax (PKB)
Source: Verdhana research
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