Honda Responds to LCGC Price Update Surpassing Rp 200 Million Due to VAT

KatadataOTO – The increase in VAT (Value Added Tax) to 12 percent will have a direct impact on the OTR (On The Road) price of cars. This includes LCGC (Low Cost Green Car).

While previously the price of an LCGC could be under IDR 200 million, now several models will exceed IDR 200 million as of January 2025.

In December 2024, the price of an LCGC like the Honda Brio Satya ranged from IDR 167.9 million to IDR 198.3 million for the highest trim. 

However, based on the latest information from Honda's official website as of Monday (13/1), the price of the lowest trim has increased by IDR 3 million to IDR 170.4 million. The highest variant, the Brio E CVT, has now reached IDR 202.5 million.

Photo : Honda Indonesia

In response, PT HPM (Honda Prospect Motor) confirmed that at the beginning of 2025, many factors are influencing the increase in Honda car prices.

“Honda will continue to provide the best value for consumers through various incentives in sales programs designed to ease the burden on consumers,” said Yusak Billy, Sales & Marketing and Aftersales Director of PT HPM to KatadataOTO, on Sunday (12/1).

Not only the Brio Satya, the Brio RS also experienced a higher price increase. The manual transmission model increased from IDR 243.1 million to IDR 248.2 million, while the automatic transmission variant went from IDR 253.1 million to IDR 258.2 million.

He revealed that the government's policy is currently being balanced with stimulus to help drive the economy in general.

“We are committed to continuing to provide the best options in this segment,” Billy affirmed.

12 Percent VAT Effective January 2025

Several manufacturers are starting to adjust the selling prices of their products at the beginning of 2025, including automotive manufacturers.

Photo : TrenOto

It should be noted that the 12 percent VAT refers to Law Number 7 of 2021 concerning the Harmonization of Tax Regulations.

“To be clear, the VAT increase from 11 percent to 12 percent is only imposed on luxury goods and services, namely certain goods and services that have already been subject to luxury goods VAT, consumed by affluent and capable members of society,” said Indonesian President Prabowo Subianto in his official statement some time ago.

To offset the VAT increase, the government has prepared 15 stimulus packages worth IDR 38.6 trillion in the form of incentives targeting low and middle-income communities as well as the business world.