New Car Sales Projection Without Incentives in 2026

KatadataOTO – The government is reportedly not going to provide automotive incentives in 2026. Environmentally friendly vehicles such as electric cars and hybrids are believed to be significantly impacted.

Various electrification models in Indonesia can currently be sold at competitive prices due to assistance from government automotive incentives.

For example, for electric cars with a minimum of 40 percent Local Component Level (TKDN). Then, imported Battery Electric Vehicles (BEVs) as long as they have a commitment to local assembly in 2026.

Next year, the prices of electric and hybrid cars are likely to increase without assistance from the government.

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Amid weakening purchasing power, the absence of stimulus makes it likely that new car sales in 2026 will remain stagnant or unable to surpass 800 thousand units.

Analysts believe that the recovery of car sales in 2026 could happen if the government strengthens stimulus and monetary policies.

“But if there is no economic improvement (next year), the prediction for new car sales in Indonesia will likely remain sluggish and stagnant. The volume is projected to only reach 700,000-800,000 units,” said Yannes Martinus Pasaribu, an automotive analyst and academic from the Bandung Institute of Technology (ITB), to KatadataOTO recently.

He emphasized the importance of a progressive stimulus from the government to reinvigorate the national automotive market.

A recovery could also occur if interest rates drop significantly and the rupiah remains stable, with a low inflation rate.

“However, this recovery is threatened because government policy signals are still contradictory, such as slow fiscal strengthening,” Yannes asserted.

For your information, new car sales for the January-November 2025 period at the retail level (distribution from dealers to consumers) were 710,084 units. Meanwhile, distribution from factories to dealers, or wholesales, reached 739,977 units.

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This figure is approaching the revised target set by Gaikindo recently, which is 780 thousand units.

With one month remaining, new car sales in December 2025 must reach at least 60 thousand units (wholesales) to meet Gaikindo's target.

Meanwhile, next year many manufacturers will have to prepare new strategies if the government decides not to continue the automotive incentives.