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Strength
4W sales rose 6.2% MoM in Oct-24 to 77K, marking the year's highest monthly level, driven by 8.7% MoM increase in ASII brands (non-ASII: +3.1% MoM), which boosted market share to 56.5% (Sep-24: 55.2%); ASII LCGC also gained market share with 7.8% higer sales, while non-ASII LCGC (notably Honda Brio) saw 16% decline.
Weakness
On a yearly basis, 4W sales declined 3.9% YoY in Oct-24, with Hyundai experiencing the steepest drop (-43.6%) from a high base in 2023; 10M24 sales fell 15.1% YoY, with ASII sales down 13.9% YoY, while non-ASII sales dropped 16.5% YoY.
Opportunity
Year-end discounts may boost 4W demand in Nov-Dec, aligning with Gaikindo's 850K target and our 860K forecast, as buyers are expected to shop ahead of a potential VAT hike to 12% in 2025; lower interest rate environment could help boost 4W sales going forward and result in improved sentiment on auto stocks.
Threat
12% VAT in 2025 will raise 4W prices and reduce purchasing power, particularly for the middle class, the largest portion of demographics, posing risks to 4W sales outlook; unclear hybrid incentives may limit penetration, especially affecting ASII and resulting in continued YTD market underperformance.
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