Ministry of Industry Optimistic New Car Production Will Reach 1 Million Units This Year

KatadataOTO – The automotive industry is facing various challenges in 2024. This has impacted sales of new cars, which have plummeted to around 865 thousand units.

This situation has prompted many parties to speak out. One of them is the Kemenperin (Ministry of Industry).

They hope that the four-wheeled vehicle market will recover soon, which would stimulate domestic sales.

“Of course, in 2025, the Ministry of Industry is very optimistic that it can achieve the production target of one million units,” said Dodiet Prasetyo, Director of Maritime Industry, Transportation Equipment, and Defense Equipment at the Ministry of Industry, in Jakarta some time ago.

Photo : KatadataOTO

According to Dodiet, there are a number of factors that can drive this, such as various relaxations provided by President Prabowo Subianto and the ministers.

For example, a three percent incentive for hybrid cars. This could attract public interest in using these environmentally friendly four-wheeled vehicles.

“The condition is to be an LCEV participant who has submitted a commitment to use locally produced components,” he said.

Then, the electric car incentive will be continued in 2025. The government will cover 10 percent of the VAT (Value Added Tax).

This way, the public will only pay two percent VAT, making it easier for buyers of electric four-wheeled vehicles.

“Then, for the BEV (Battery Electric Vehicle) industry that is building production facilities or wants to expand its production lines, a stimulus will be given in the form of government-borne import duties and zero percent luxury goods sales tax (PPnBM),” Dodiet continued.

Dodiet also mentioned that about 25 regions are providing relief for the implementation of the motor vehicle tax (PKB) surcharge and the vehicle ownership transfer fee (BBNKB).

The form of relief differs and varies in each province. For example, a three-month vehicle tax discount.

There are also regions that will not apply the BBNKB or PKB surcharges in 2025, as is the case with the Jakarta regional government.

The various stimuli mentioned above are expected to maintain public purchasing power, especially after the government implements the 12 percent VAT this year.

Photo : Chery

“So we really hope that the synergy between the central and regional governments will support the achievement of the new car production target of one million units,” Dodiet emphasized.

As a reminder, Gaikindo (Association of Indonesian Automotive Industries) has set the new car sales target for 2025 at 850 thousand units.

The number above comes with a potential correction down to 750 thousand units. It also has the potential to increase to 900 thousand units.