Since the sudden death of former president Michael D Ruslim in 2010, PT Astra International Tbk, Indonesia's largest conglomerate, has been led by Prijono Sugiarto, formerly sales engineering manager at Daimler Benz Indonesia. The year 2013 saw the company's profits decline for the first time in seven years, encouraging Sugiarto to diversify further. The company's after-tax net income has fluctuated between US$165 million and US$524 million over the past five quarters. As of June 2021, Astra International has a market cap of US$15.12 billion, making it the 1,177th largest company in the world in terms of market cap.
In fact, Astra is the bellwether of the Indonesian economy. Not only because of its size, but also because most of its major subsidiaries are listed on the local stock market and are involved in mining, farming and banking. Analysts estimate that the group accounts for nearly 10% of the total market capitalization of Indonesia's listed companies.
Astra International was founded in 1957 by William Soeryadjaya and Kian Tie Tjia and is headquartered in Jakarta, Indonesia. At that time, it was a general trading company called Astra International Inc. It was renamed PT Astra International Tbk in 1990 for the purpose of an initial public offering (IPO). Astra is now 50.1% owned by the automotive subsidiary of Asian conglomerate Jardine Matheson Holdings, which also controls Indonesia's largest supermarket chain and Mandarin Oriental Hotel Group. The subsidiary also controls Indonesia's largest supermarket chain and Mandarin Oriental Hotel Group.
Astra currently operates in Indonesia through 238 subsidiaries, joint ventures and affiliates, supported by 188,000 employees. The company is engaged in the manufacture, assembly and distribution of cars, motorcycles and related spare parts through a diverse range of products and services, and operates through the following business segments: Automotive, Financial Services, Heavy Equipment, Mining, Construction and Energy (HEMCE); Agribusiness; Infrastructure and Logistics; Information Technology; and Property. The Automotive segment includes automobiles, motorcycles and spare parts.
The HEMCE segment includes construction machinery, mining contractors, mining and construction. The Infrastructure and Logistics segment includes infrastructure and logistics value chains. The Information Technology division, through Astragraphia, covers document solutions, information and communication technologies.
The company is also the largest independent automotive group in Southeast Asia and is a supplier of a full range of automotive and motorcycle products in partnership with Toyota, Daihatsu, Isuzu, UD Trucks, Peugeot, BMW and Honda. Toyota is a major leader in the Indonesian wholesale car market.
The automotive business is Astra's core business although it has become much less dependent on car sales. In the early 2000s, approximately 80% of Astra's revenue was generated from the automotive business, but this figure has now fallen to 50%. This is a deliberate change as the outlook for the car industry is increasingly undermined by government policy. The government is trying to curb huge subsidies on fuel, raise taxes on owning more than one car and curb excessive car loans. This may lead to less profit for the auto industry in the future. On the other hand, Indonesia's current low per capita car ratio combined with expanding purchasing power is keeping car sales on track.
Astra also has a strong presence in the automotive component space through its subsidiary PT Astra Otoparts Tbk. In 2019 Astra invested US$150 million in Go-Jek, an app-based on-demand service company.
For the foreseeable future, Astra International is likely to maintain its position as the top company in Indonesia. With its expanding diversification, the company is present in almost every major sector of the Indonesian economy and is therefore not as vulnerable to fluctuations as most other Indonesian companies that are overly dependent on one particular sector.
