Mercedes-Benz Still Awaiting Certainty on IEU-CEPA Implementing Regulations in Indonesia

KatadataOTO – The IEU-CEPA or the Indonesia-European Union Comprehensive Economic Partnership Agreement was agreed upon some time ago and received a warm welcome, especially from German automotive manufacturers, including Mercedes-Benz.

It should be noted that the agreement includes a deal regarding the reduction of import duties for European cars imported into Indonesia.

Nevertheless, Mercedes-Benz has stated that they are still awaiting implementation guidelines from the government regarding the implementation of IEU-CEPA.

“We don't yet know the timing of its implementation, nor which products are included in the agreement,” said Donald Rachmat, CEO of Mercedes-Benz Indonesia in Jakarta, on Sunday (30/11).

Photo: Mercedes-Benz

There is a chance that Mercedes-Benz car prices could become more competitive thanks to the implementation of IEU-CEPA. This would make it an attractive option for consumers amidst tight competition with newcomers in Indonesia.

Although Mercedes-Benz has started assembling at least eight vehicle models domestically, some of their products are still imported fully built-up from Germany, such as their electric vehicle line.

Some of them are the EQE 350+, EQS 450+, and the EQS 450+ AMG Line. The prices for this range of Mercedes-Benz electric cars start from around Rp 2.2 billion.

If IEU-CEPA can reduce import duties from Germany, it would certainly be advantageous for Mercedes-Benz.

“What we can be sure of is that when the government decides on a partnership, it is for the best of Indonesia,” Donald affirmed.

He further emphasized that the future implementation of IEU-CEPA in Indonesia presents a new opportunity to advance both the automotive industry and the Mercedes-Benz brand within the country.

Photo: Mercedes-Benz

For your information, the IEU-CEPA policy states that there is an agreement to reduce import duties on products from Europe to Indonesia by 98.5 percent. This includes four-wheeled vehicles.

“We have committed to working harder on diversification and cooperation to support jobs and growth in the European Union,” said Ursula von der Leyen, President of the European Commission, some time ago.

If implemented in Indonesia, a number of brands besides Mercedes-Benz are likely to benefit. For example, BMW, Audi, and Citroen.