Minister of Industry Proposes New Car Prices Be Lowered to Boost Sales

KatadataOTO – The Indonesian automotive industry is facing a major challenge at the beginning of 2025. Especially for the new car market.

Sales of new four-wheeled vehicles are still quite sluggish. According to data from Gaikindo (Association of Indonesian Automotive Industries) in January 2025, shipments from factories to dealers (Wholesales) were only 61,843 units.

The figure above is a correction of 11.3 percent compared to the same period last year. According to records, in January 2024 there were 69,758 units.

Meanwhile, retail sales suffered a similar fate. Dropping 18.6 percent from 78,437 units to 63,858 units.

Photo : KatadataOTO

Seeing the data above, Menperin (Minister of Industry) is paying special attention to the four-wheeled vehicle industry in the country.

“For the government, the decline must be an important note because the automotive contribution is very high,” said Agus Gumiwang Kartasasmita, Minister of Industry, at the inauguration of the Daihatsu factory in Karawang, West Java, Thursday (27/02).

One of President Prabowo Subianto's aides also gave a number of suggestions for domestic producers.

“We hope there will be new policies, for example not directives (like) sacrificing margins or lowering vehicle selling prices,” continued the Minister of Industry.

He also hopes that with the suggestions above, it can revive new car sales in 2025.

Considering that one of the factors for the sluggish four-wheeled vehicle market is the decline in people's purchasing power.

“Of the many factors, we see a connection with the decline in people's purchasing power, global economic challenges, and others,” said Agus.

New Car Sales Target in 2025

It should be noted, Gaikindo has set a new car sales target for this year at 850 thousand units.

This number is accompanied by a potential correction down to 750 thousand units. However, it also has the potential to increase to 900 thousand units.

To offset this, it was mentioned that the four-wheeled vehicle industry requires several stimuli.

Photo : KatadataOTO

“This (incentive) will have an impact on increasing state revenue, both central and regional, consisting of VAT, BBNKB, PKB, corporate income tax, and individual income tax,” said Kukuh Kumara, Secretary General of Gaikindo on a different occasion.

Kukuh emphasized that the provision of incentives from the government can increase the growth of the motor vehicle industry and boost sales.

By doing so, it can stimulate various component industries, banking, and financing institutions.