Airlangga Hartarto's Considerations for Not Providing Incentives Next Year

KatadataOTO – The Indonesian automotive industry players are currently struggling to recover. Therefore, several parties believe that assistance needs to be provided in 2026.

However, one of President Prabowo Subianto's ministers has confirmed that the government does not want to provide incentives next year.

This is because there are several reasons why they are reluctant to provide assistance to car and motorcycle manufacturers in the country.

“Incentives have been given for two years to establish factories, and the results are already tangible,” said Airlangga Hartarto, Coordinating Minister for Economic Affairs, during a visit to GJAW 2025 on Saturday (29/11).

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Airlangga stated that car manufacturers who entered through the EV import incentive scheme have reportedly started local assembly.

This has apparently had a positive impact, such as the emergence of products with competitive price tags.

“If we look at this year, there are already many with prices relatively below Rp 300 million,” Airlangga Hartarto continued.

Furthermore, it was said that the government has allocated incentives with a fairly large budget over the last two years.

The figure reached Rp 7 trillion for the automotive sector alone. He considers this amount to be more than sufficient.

With progress deemed adequate, the government now wants to shift its focus to creating national production facilities.

The plan above is indicated to be the government's discourse for producing national cars and motorcycles.

As stated by President Prabowo Subianto some time ago. So the intention of the number one person in Indonesia can proceed smoothly.

“Now the President wants to build a factory. Perhaps those funds can be redirected to build a national factory,” Airlangga Hartarto affirmed.

It should be noted that since the Covid-19 pandemic, the government has several times disbursed fiscal incentives to support the automotive industry.

For example, in 2021, assistance was provided in the form of a Government-Borne Luxury Goods Sales Tax (PPnBM DTP).

Photo: KatadataOTO

The stimulus above proved capable of boosting car sales amidst sluggish demand. After that, similar support continued to be provided each year with different criteria.

Entering 2025, the incentive scheme's focus shifted. The government is providing a zero rupiah import duty facility for electric car manufacturers who want to enter the Indonesian market.

However, there are a number of conditions they must meet. For example, starting in 2026, manufacturers are required to establish a factory and produce the same model domestically.