Gaikindo Sets 850,000 Car Sales Target for 2025

KatadataOTO – National car sales throughout 2024 experienced a decline compared to the achievements of 2023, failing to reach one million units. There were several contributing factors, such as the general election and the rise in the benchmark interest rate.

Overall, national retail sales (dealer to consumer) in 2024 were 889,680 units. This figure is down from the same period in 2023, which saw 998,059 units.

The Gaikindo (Association of Indonesia Automotive Industries) revealed that the significant political agenda caused a number of consumers to postpone vehicle purchases.

Additionally, there was talk of providing incentives for hybrid cars towards the end of 2024. As a result, many potential buyers held off on their purchases to await certainty on the matter.

Photo : KatadataOTO

Entering 2025, the automotive industry will still face challenges. These include the implementation of a 12 percent VAT, a surcharge on PKB (Motor Vehicle Tax), and a surcharge on BBNKB (Motor Vehicle Title Transfer Fee).

Therefore, Gaikindo has set the 2025 car sales target at 850 thousand units. This comes with a potential correction down to 750 thousand units but with a chance to increase to 900 thousand units.

To offset this, the government previously officially provided a three percent incentive for hybrid cars. 

“This (incentive) will impact the increase in state revenue, both central and regional, consisting of VAT, BBNKB, PKB, corporate income tax, and individual income tax,” said Kukuh Kumara, General Secretary of Gaikindo, as quoted from an official statement on Thursday (16/1).

He emphasized that the provision of government incentives can boost the growth of the motor vehicle industry and drive sales. This, in turn, stimulates various industries, from components and banking to financing institutions.

Additional Incentives Are Needed

Photo : KatadataOTO

Previously, an observer stated that incentives in the form of a PPnBM discount could expand the market by up to 16 percent.

“This is our simulation if we want to provide incentives, even up to a zero percent PPnBM,” said Riyanto, an automotive observer from LPEM UI (Institute for Economic and Social Research, University of Indonesia), recently.

Furthermore, a relaxation of the surcharge should also be considered. This is because the additional levy could cause the total car tax to increase by 48.9 percent, while new car prices would rise by 6.2 percent.