Automotive - Inline '25F (2W & 4W); expect sustained pressure in ‘26F

KBVS Update
Monday, 19 January 2026

Automotive - Inline '25F (2W & 4W); expect sustained pressure in ‘26F
(Maintain Neutral)

* Total 4W sales in FY25 reached 803,687 units (-7.2% yoy), while retail sales declined by 6.3% yoy to 833,692 units. Despite the sustained challenges and pressure, the FY25 sales volume figure arrived in line with our ‘25F forecast for domestic car sales and Gaikindo’s ‘25F expectation.

* The ‘26F recovery of the 2W and 4W sector pivots on a rebirth in spending confidence. Despite the fact that we expect the continuation of various attractive dealer promotions and softer auto loan yields could play a more vital role, the discontinuation of several EV-related auto incentives could add demand pressure to the ‘26F sales.

* It's worth noting that both the inline 2W and 4W FY25 sales volumes are mainly driven by strong Dec 25 sales and the EV car penetration throughout 2025. Our best and optimistic scenario suggests that the ‘26F car and motorcycle are likely to remain flat.

* More moderate cautious economic activity and warmer geopolitical tension will become other key crucial catalysts. We maintain a neutral rating on the sector. Our pick on the sector remains *ASII (BUY) *. We will, however, revisit our model as its closing price has reached our SOTP-based TP of IDR 7,050 (8.6x ‘26F P/E).

Regards,
Akhmad Nurcahyadi - KBVS Research Team