The government claims that stopping incentives can spur factory construction.

KatadataOTO – Car sales in Indonesia throughout 2025 continue to experience pressure. Retail sales from January to November 2025 were only 735,977 units.

That number is much smaller compared to the same period last year which recorded 807,586 units. This means retail sales experienced a decrease of 67,809 units or about 8.4 percent.

This situation has prompted Gaikindo to take the initiative to reduce the sales target for vehicles. From the previous target of around 850,000 units to only 780,000 units.

The pressure is expected to continue in 2026. This is because the government has decided to no longer provide incentives for vehicle purchases.

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However, Airlangga Hartarto, Coordinating Minister for Economic Affairs of the Republic of Indonesia, revealed that this could benefit the country. This is because car manufacturers are still trying to enter the country by investing in building factories.

“Precisely because the incentives are over, everything can proceed. The stimulus was given so they would be willing to build factories and their production costs would be lower,” he said.

According to him, there is no reason for automotive manufacturers to be reluctant to establish production facilities in the country. Especially those who have already enjoyed incentives and have successfully grown.

“VinFast can invest and build a factory, so other manufacturers who don't have a factory yet but are enjoying incentives must be able to do it too,” Airlangga asserted.

However, he assured that the government will continue to encourage the growth of the automotive industry. One way is by implementing the national car program that is being promoted.

“For the national car, of course, the budget has been planned. We can actually learn from VinFast and everything is in process,” he then asserted.

Not a Simple Matter

The Vietnamese car manufacturer, VinFast, also gave a little insight regarding building an automotive company. According to them, the process is indeed very difficult and full of challenges.

“To be like VinFast, Indonesia must have someone like Pham Nhat Vuong, our very dedicated Chairman. He has even poured USD 17 billion into vehicle development,” said Pham Sanh Chau, CEO of VinFast Asia.

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According to him, Pham Nhat Vuong leads VinFast not just for business but as a source of national pride. Therefore, local industries are also involved to strengthen their country's position.

Additionally, the many business lines of Vin Group also provide a distinct advantage. Because each company is asked to invest in VinFast so that the industry's development can be optimal.