Daihatsu Still Awaiting Further Relaxation of TKDN Regulations

KatadataOTO – Not long ago, President Prabowo Subianto revealed his intention to relax the policy regarding TKDN (Local Content Requirement).

This is considered to be able to attract more investors to Indonesia. It would also trim regulations that are deemed to complicate business.

However, the regulation has not been officially implemented. But if applied, it could have an impact, including in the automotive industry.

Considering there are currently TKDN regulations that apply to several types of vehicles, such as LCGC (Low Cost Green Car), electric cars, and hybrid cars.

Photo : ADM

If the minimum TKDN percentage requirement is met, the related model is entitled to receive incentives from the government. This makes its price tag more competitive.

The relaxation of TKDN rules could have both positive and negative effects for automotive manufacturers in Indonesia.

However, in response to this, PT ADM (Astra Daihatsu Motor) emphasized that it will wait for the official regulation from the government.

“That was just conveyed verbally. We are waiting for directions from the ministry related to the automotive industry,” said Sri Agung Handayani, Marketing and Corporate Communication Director of PT ADM in South Jakarta, Wednesday (16/04).

It should be noted that Daihatsu is a manufacturer where almost all of its models have a TKDN of at least 80 percent.

This is considered one of the reasons why Daihatsu car prices can be competitive and become a top choice for first-time car buyers.

“We have been committed for a long time from the beginning, then there was the LCGC program. We have to wait and see what the policy (on relaxing TKDN rules) will be like,” he stressed.

Furthermore, Agung believes the government will consider many sectors when it comes to TKDN in the automotive industry.

“The government will certainly look at the extent of MSME (Micro, Small, and Medium Enterprises) involvement in the manufacturing business of all manufacturers in Indonesia,” said Agung.

For your information, President Prabowo Subianto is said to have instructed his ministers to review the TKDN regulation.

Photo : Daihatsu

“We have to be realistic, forcing TKDN ultimately makes us less competitive. I strongly agree that TKDN should be flexible,” said Prabowo Subianto some time ago.

According to the President, forcing the current TKDN rules could make potential investors overlook the Indonesian market and turn to other countries.

As an alternative, he hopes that the mechanism for implementing TKDN can be changed. However, it is not yet clear whether the same will apply to the automotive sector.