Indonesia's Car Sales Target Will Be Difficult to Achieve Without Incentives

KatadataOTO – Car sales in Indonesia for the January-September 2025 period are still quite far from the target set by Gaikindo at 850 thousand units.

Overall, wholesales (distribution from factory to dealer) of new cars were 62,071 units. Meanwhile, throughout 2025, the figure is 561,819 units.

This means there is still a difference of almost 300 thousand units to reach 850 thousand units, or at least 200 thousand units to achieve Gaikindo's lowest car sales target.

Toyota, as one of the vehicle manufacturers in Indonesia, highlights the high number of Non-Performing Loans (NPL) or bad debts as an indicator of economic decline.

Photo : KatadataOTO

Nevertheless, the Japanese manufacturer mentioned that there are initiatives the government can take to pursue the car sales target towards the end of the year,

“Yes (it can be achieved), who knows, maybe the government will suddenly provide some relaxation,” said Bob Azam, Vice President Director of PT Toyota Motor Manufacturing Indonesia (TMMIN) to KatadataOTO recently.

According to him, tax incentives or subsidies from the government have been proven to help stimulate car sales, as was implemented during the Covid-19 pandemic.

Various government policies in the automotive sector are also expected to be more aggressive.

There are concerns that if the incentive targets are not appropriate, it could lead to losses. Therefore, policies related to subsidies need to consider many factors.

Speaking about the form of incentives, Bob revealed that one that could be implemented is a reduction in the Luxury Goods Sales Tax (PPnBM).

“Just a reduction in PPnBM. People will still pay the BBNKB (Motor Vehicle Title Transfer Fee) and so on, so regional taxes will also be maintained,” he asserted.

For your information, previously the type of car targeting first-time buyers, namely the Low Cost Green Car (LCGC), was offered with the PPnBM covered by the government.

The maximum PPnBM for LCGC is 15 percent, but LCGC vehicle lines like the Toyota Agya and Daihatsu Ayla are only charged three percent.

Photo : KatadataOTO

During the pandemic, the government provided a stimulus in the form of a PPnBM discount of up to 100 percent.

This was said to have proven helpful in boosting sales amidst the Covid-19 outbreak. Then, new car sales became vibrant again.

If the goal is to achieve the car sales target set by Gaikindo, providing a similar stimulus is considered a potential solution.