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since Soeryadjaja’s era and following expansion in this sector
under the new owner, the Jakarta-listed company is now
considered the largest independent automotive group in
Southeast Asia. Parent company Jardine has been successful
in developing a network of Mercedes-Benz dealerships and
a portfolio of specialist franchises that include Aston Martin,
Audi, Volkswagen, Jaguar, Land Rover and Porsche.
autoMotive Still Down
However, despite having long dominated the automotive
market in Indonesia, other players, including Astra’s biggest
competitor, PT Indomobil Sukses Internasional Tbk, did not
remain idle. While carmakers aggressively introduced new
vehicle models to win consumers’ hearts, distributors such
as Indomobil offered competitive retail prices and attractive
financing schemes.
Astra said its share of the automobile market dropped to 48
percent by the of June from 56 percent in the same period last
year. Its share of the motorcycle market also decreased to 74
percent from 77 percent.
Astra, through its various units, is the sole distributor of
brands such as Toyota, Daihatsu, Isuzu, BMW, Peugeot and UD
Trucks. It is also the sole distributor of Honda motorcycles in
Indonesia. The company is supported by its automotive parts
and after-sales-service arm, PT Astra OtopartsTbk.
Stefanus Darmagiri, an analyst at state-owned brokerage
Danareksa Sekuritas,was quoted by Investor Daily on July 19
as saying that Astra’s weaker performance in the automotive
sector was reflected in its vehicle sales growth, which was
lower than the national vehicle sales growth.
According to the latest industry association data, nationwide
vehicle sales increased 4 percent in the first half to 554,000
units, while Astra’s declined 10 percent to 268,000 units.
However, the introduction of new editions of the Toyota
Rush and Daihatsu Terios sport utility vehicles by Indonesia’s
two most popular automotive brands helped Astra to somewhat
contain declining sales.
Still, Danareksa revised its target for Astra’s automotive
sales for the full year slightly downwards to 550,310 units from
566,940 units.
Amid the slowdown in Astra’s automotive sales, Danareksa
is banking on a recovery in global commodity prices to boost
the group’s heavy equipment distributor arm, PT United
Tractors Tbk. The securities company noted that Astra is
setting aside a significant amount for capital expenditure at
United Tractors amid expectations of higher demand for heavy
equipment in the coal industry.
Prijono said the company has lifted its planned capital
expenditure for this year to Rp 29 trillion from Rp 25 trillion
previously. This is nearly double the amount set aside over the
past five years. Around Rp 12 trillion, or more than 41 percent
of the Rp 29 trillion, will go to United Tractors.
United Tractors reported a 60 percent increase in net
income to Rp 5.5 trillion in the first half, thanks to improved
performance in its construction machinery and mining
contracting businesses, as well as its mining operations, all
driven by higher coal prices.
Its other commodity-related business arm, palm oil
producer Astra Agro Lestari, saw its net income decline 23
percent to Rp 355 billion, primarily due to lower crude palm oil
prices. Astra controls a 79.7 percent stake in Astra Agro.
inveStMentunaffecteD
Despite these challenges, Astra is still on an investment spree.
In February, the group spent $150 million on the acquisition of
a minority stake in ride-hailing firm Go-Jek.
Speaking to local media, Prijono denied that Astra’s
investment in the popular ride-hailing service was intended to
pave the way for the group to sell more cars and motorcycles.
He said the group’s management had been interested
in investing in the unicorn startup because it is expected
to participate in helping the nation’s small and medium
enterprises. He told reporters in February that Astra was
looking forward to innovations it can develop in cooperation
with Go-Jek to help SME growth in the country.
Other than this investment, the group is also active in the
infrastructure sector and one of its big plans is to invest and
become the operator of the upcoming Patimban Seaport in
Subang, West Java. This project was expected to break ground
in July and the government has not yet made a final decision on
who will operate the port.
Astra is already involved in some infrastructure business,
having acquired a 45 percent interest in the fully operational
116-kilometer Cikopo-PalimananToll Road in West Java in
May last year, adding to its interest in five other toll roads,
including a 79.3 percent stake in the Tangerang-Merak Toll
Road in Banten.
The group’s financial services division did not perform well
either, with net income having decreased 6 percent to Rp 1.1
trillion, due to a lower contribution from Bank Permata.
Meanwhile, Astra’s other businesses in the information
technology and property sectors are still dwarfs in terms of
their net income contributions.
Astra Graphia, which is 76.9 percent-owned, posted a
24 percent increase in its net income to Rp 88 billion, while
the group’s property division reported a net income of Rp 48
billion. Among its property assets are Anandamaya Residences,
an apartment complex in Central Jakarta, and Arumaya, a
residential development in South Jakarta. Astra is also in the
process of developing a 67-hectare site in East Jakarta through
its subsidiary.
Astra is already involved
in some infrastructure
business, having acquired
a 45 percent interest
in the fully operational
116-kilometer Cikopo-
PalimananToll Road
in West Java in May
last year, adding to its
interest in five other toll
roads, including a 79.3
percent stake in the
Tangerang-Merak Toll
Road in Banten.
Ruht semiono/sp photo