Without the PPnBM Discount, 2025 Car Sales Could Drop Again

KatadataOTO – Overall car wholesales (distribution from factory to dealer) throughout 2024 experienced a decline from 2023. The figure was 865,723 units, down from the previous 1,005,802 units.

This year, new challenges are being faced, such as the increase in VAT to 12 percent. Automotive observers believe that the government needs to provide relief if it wants to boost national car sales again.

One way is by providing a discount on the PPnBM (Luxury Goods Sales Tax) which is imposed on new cars.

“This is our simulation if we want to provide incentives, even up to zero percent PPnBM. The market will grow by perhaps up to 16 percent,” said Riyanto, an automotive observer from LPEM UI (Institute for Economic and Social Research), as quoted by Antara on Wednesday (15/1).

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Based on his calculations, the PPnBM incentive could increase car sales by up to 160,428 units. Meanwhile, a five percent tax discount could contribute an extra 106,952 units.

If a 7.5 percent discount is given, car prices could potentially drop by 5.3 percent and boost sales by 80,214 units.

In addition, providing incentives will have a positive impact on the economy, followed by an increase in the automotive workforce by 7,740 to 23,221 people.

Besides the 12 percent VAT, Riyanto highlighted the existence of an 'opsen' levy on Motor Vehicle Tax (PKB) and Vehicle Title Transfer Fees (BBNKB).

He emphasized that the 'opsen' has a negative impact on the automotive industry, causing the total car tax to increase by 48.9 percent and new car prices to jump by 6.2 percent.

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Therefore, with these various policies, national car sales in 2025 are predicted to decrease by 9.3 percent to only around 780 thousand units.

For your information, several factors hampered car sales in 2024, for example, the general election. The series of political events that occurred made many consumers tend to postpone their purchases.

Global economic turmoil, such as the increase in the benchmark interest rate set by BI (Bank Indonesia), also played a role in slowing down car sales.