Car maker, PT Indomobil Sukses International Tbk (IDX: IMAS) believes that the Indonesian automotive sector will slowly recover starting next year even the market showing a weakening in 2020 - Photo by Industry Ministry Office

JAKARTA (TheInsiderStories) – Car maker, PT Indomobil Sukses International Tbk (IDX: IMAS) believes that the Indonesian automotive sector will slowly recover starting next year even the market showing a weakening in 2020. The company believed, at the beginning of 2021, the four-wheeled vehicle market will recover at 80 percent and slowly reach last year’ level.

President director of the company, Jusak Kertowidojo, in a virtual conference on Wednesday (11/11), reported the pandemic had resulted in a low demand in the automotive market. Based on the company data, in April, the market sales fell nearly 90 percent, he adds.

“However, entering September the demand started to improved around 50 of the normal time before the pandemic. We estimate that in December it could be 65 percent of the normal period,” he said.

Referring to data from the Association of Indonesian Automotive Industries, retail car sales (from dealers to consumers) in September 2020 reached 43,362 units. This figure increased by 13.1 percent compared to the previous month of 37,655 units.

In the same period, the wholesales (shipments from factories to dealers) rose 23.2 percent from 37,291 units to 48,554 units. Competition for retail sales of four or more wheeled vehicles throughout September bring Suzuki and Honda became the best-selling brands. Suzuki recorded retail sales of 5,710 units and Honda 5,835 units.

Last month, one of the auto-maker’ shareholders, PT Bina Raya Perkasa released all shares in to a private company based in Surabaya, East Java, PT Sejahtera Raya Perkasa (SRP) with total amount Rp783.67 billion (US$53.31 million). The seller owned by Indonesian entrepreneur Pieter Tanuri. He has sold 22 percent of the issuer shares or equal to 878.56 million shares with price Rp892 a unit on Oct. 1, 2020, for investment purposes.

Tanuri’ firm engaged in management consulting activities with major ownerships hold by the owner of football club, PT Bali Bintang Sejahtera Tbk (IDX: BOLA). He is the major shareholder and also serves as a commissioner at the public company.

For background, on August 27, Tanuri purchased 919.15 million shares of the car-maker with price of Rp550 per share. Then, he bought another 40.74 million shares at Rp620 a unit. He absorbs the new shares through rights issue of Indomobil.

The unit of Salim Group has released up to 1.23 billion shares. The former major shareholder of tyre-maker, PT Multistrada Arah Sarana Tbk (IDX: MASA) become a shareholders of the automaker together with Singapore’ Gallant Venture Ltd owned by the Salim Group, Keppel Group and JTC Group.

The partners not absorbed the new shares and plan to transfer all of their rights to Bina Raya Perkasa. After the transaction, the ownerships of Gallant Venture dropped from 71.49 percent to 49.49 percent.

Last year, Indomobil was divested Multistrada shares to Michelin Group for Rp1.51 trillion. The company sold the shares through its subsidiary, PT Central Sole Agency, PT IMG Sejahtera Langgeng, and PT Indomobil Prima Niaga.

On Jan. 23, 2019, the French tire manufacturer acquired 80 percent shares of MASA for $439 million. The acquisition was carried out by the tyre-maker to strengthen the growing market in Indonesia.

According to the CEO, Jean-Dominique Senard, the acquisition was the right opportunity for Michelin to expand its market in Indonesia. He noted, “Indonesia as the highest population in Southeast Asia has a growing market potential.”

Meanwhile, Tanuri believed that Michelin is the right partner for Multistrada to face the future. The tire maker, said will strengthen its presence in the domestic market by utilizing technical expertise and limited new investment.

The tire producer will gradually convert the production of passenger vehicle tires from level third quality to level second under the Michelin brand. Thus, it will encourage growth in demand for quality tire 2 in Europe, North America and Asia.

US$1: Rp14,000

Written by Editorial Staff, Email: theinsiderstories@gmail.com