Indomobil launched its LCGC, Datsun

Indomobil launched its LCGC, Datsun

Indomobil (IMAS IJ, BUY, TP IDR6,000) formally launched its new low-costs green car (LCGC), Datsun on September 17th. IMAS’ LCGC will be marketed in two models, Datsun GO with 5-seater passengers and Datsun Go+ with 7-seater passengers. Key takeaways of the launching ceremony are:
¨ Both Datsun GO and Datsun GO+ will be powered by 1.2ltr engine (3-cylinder). Its ground clearance is around 18cm, same as that of Daihatsu Ayla, but it is lower than Daihatsu Xenia.

¨ Target consumers are first time car buyers ranging from 24 years-old young executives to young family with two kids. Datsun GO selling price will be around IDR80m/unit, while Nissan GO+ will be offered at around IDR95m/unit.

¨ IMAS aims to sell Datsun by 6,000 units per month or around 65k units per year.

¨ Datsun first delivery to Indonesia consumers will be in April 2014, in which test drive and marketing will be in January 2014. The model will be produced in IMAS plant which located at Purwakarta.

¨ IMAS has increased its plant capacity to 180k units per annum in 2013, from 100k units in 2012. Going forward, IMAS will increase its plant production capacity to 300k units per annum in 2016.

¨ We see that Datsun exterior model is quite attractive, it looks simple and compact. The model is equipped with 1.2ltr engine which is likely enough to carry seven passengers. For comparison, current lowest MPV model, Daihatsu Xenia is equipped by 1.0ltr and 1.3ltr engine which is sufficient for driving at hilly area.

¨ However, interior of Datsun is still confidential. If Datsun interior is attractive, the model will be a tough competitor for Daihatsu Xenia which selling price is IDR135m/unit for the modest model with 1.0ltr engine and IDR149m/unit for standard model with 1.3ltr engine. Both Xenia selling prices are 42% and 57% respectively higher than that of Datsun highest model price.

¨ We see that Datsun model sales will be around 3,000-5,000 units per month. IMAS sales target of 6,000 units per month is likely too aggressive. For comparison, Nissan sales – which include Livina, Evalia, and March – were averagely 5,200 units per month in 1H13. Daihatsu and Toyota – which has larger sales distributors – targets to sell 4,000 units Ayla per month and 5,000-6,000 units Agya per month.

We may revise our forecast to include additional Datsun sales in our forecast. We see that Datsun will boost IMAS sales, however Datsun profit margin may be lower than that of Nissan since new brand commonly needs aggressive marketing activities which require high selling and advertising expenses.

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