Industry Minister Asks Automotive Manufacturers Not to Lay Off and to Increase Investment

KatadataOTO – Agus Gumiwang Kartasasmita, Minister of Industry, has asked that players in the automotive industry not terminate or lay off their employees. This request is very important considering that efficiency is usually used as a solution when companies face pressure.

Meanwhile, the condition of the automotive market in Indonesia is currently full of challenges. This is evident from the decrease in sales figures compared to last year's achievements.

"I always ask these companies that there should be no layoffs even though we are now facing quite challenging conditions," said Agus Gumiwang Kartasasmita, as reported by Antara (04/09).

He also revealed that the weakening of the domestic automotive market does not actually have a significant impact on production volume. This is because the demand for vehicles from neighboring countries is relatively stable.

Photo : Daihatsu

Therefore, he encourages companies to increase investment and boost domestic production. However, this does take time.

“The global market cannot be determined by management in Indonesia. They must first talk to their respective principals to be able to open or allow products from Indonesia into a wider market," Agus emphasized.

Car manufacturers in the country also claim to have made efforts to prevent layoffs, one of which is Toyota, which acknowledges its vehicle production originates from Japan.

“We always value what is called long-term employment,” said Jap Ernando Demily, Marketing Director of PT TAM, when met in Tangerang some time ago.

Nevertheless, he believes that assistance from the government is still awaited through policies or regulations related to four-wheeled vehicles. One of these is the implementation of tax incentives for Low Cost Green Cars (LCGC), a program which has been extended again until 2031.

Meanwhile, Suzuki revealed another challenge, namely the vehicle price war, especially after manufacturers from China entered Indonesia. Although it does not have a direct impact, it still has an influence.

Photo : KatadataOTO

Moreover, amidst declining sales or weakening public purchasing power, many models ultimately fail to reach their target consumers, especially among first-time car buyers.

“Of course, we are not the only ones who suffer because production is down; automatically, the fixed cost must also be borne at a higher rate per unit,” said Shodiq Wicaksono, Managing Director of Suzuki Indomobil Motor (SIM), some time ago.