Automotive

4W Market: Persisting EV Competition Pressure; Commercial Segment Continues to Drive Recovery

 

  • Our visit to GIIAS confirms intensifying passenger competition, with more Chinese brand launches broadening to SUV segment.
  • 1H26 commercial segment sales rose +27% YoY vs. passenger +7%, driven by electrified +76% YoY.
  • ASII’s 4W business may continue to benefit from volume in 2H26 but margin upside is limited given stronger commercial mix.

 

GIIAS 2026: Intensifying EV Launches

Our visit to GIIAS 2026 reinforced the increasingly competitive industry backdrop, with a broader brand lineup and more Chinese EV entrants. Customer interest remained concentrated in mass-market compact MPVs, small MPVs, SUVs and hybrid models. New launches broadened across both the Rp200–300mn mass-market segment and higher-priced SUVs. Meanwhile, promotional activity remained within normal levels.

 

1H26: commercial led recovery, electrification accelerated

Our channel checks were consistent with recent sales trends. Passenger segment sales rose 7% yoy in 1H26, with growth increasingly driven by electrified models: BEV sales rose 91% yoy to 70.1k units, lifting penetration to 16.1% from 9.8% in 1H25; HEV sales +49% yoy to 40.4k units, while PHEV sales nearly tripled to 5.0k units. Combined HEV, PHEV and BEV wholesales rose 76% yoy to 115.5k units, well ahead of the 16% growth in the overall market, lifting their combined share to 26.5% from 17.5%. Meanwhile, commercial segment sales rose a stronger 27% yoy, supported by logistics demand and government-linked programs.

 

Read-through to ASII’s 4W earnings outlook

ASII’s 1H26 4W sales volume rose by a healthy 10% yoy, but its operating margin remained flat at 1.2%. Management attributed this to sales mix and competition, consistent with industry data. Looking into 2H26, we expect commercial demand to remain relatively steady but see limited scope for margin expansion given persisting competition in passenger segment. Management also indicated that 4W manufacturing margins could begin to reflect higher raw material costs in 2H26.

 

Reiterate Buy rating on ASII on steady 2H26 4W earnings

We reiterate our Buy rating on ASII, as we believe resilient FY26 earnings and a recovery into FY27 are not fully reflected in the current valuation of 7.0x P/E, or -1SD below its 5-year mean. While the near-term 4W earnings outlook remains steady rather than accelerating, we expect 2H26 earnings support from a recovery in 2W and UNTR, driven by higher PAMA volumes following the expected RKAB revision and a stronger contribution from Martabe. We retain our Neutral Tactical 3M view, as the auto business currently offers limited near-term catalysts and 4W margin upside remains constrained. Key downside risks are further margin pressure in the auto business and a lower-than-expected RKAB volume revision for PAMA’s coal-mining clients.

 

… Read More 20260807 Automotive