Gaikindo's Response to the Government's Proposed TKDN Regulations

KatadataOTO – The government plans to relax the TKDN (Local Content Requirement) regulations. This will be done in response to new policies from Donald Trump as President of the United States.

In response, Gaikindo (Association of Indonesian Automotive Industries) intends to hold a meeting with the government.

This step is being taken to defend the nation's automotive industry. Because it involves many companies within it.

“The (Indonesian) automotive industry has been built for decades. We don't want this industry to collapse, so we will coordinate with the government regarding this matter,” said Yohanes Nangoi, Chairman of Gaikindo, some time ago.

Photo : Neta Auto Indonesia

It was further stated that the presence of LCGC (Low Cost Green Car) in Indonesia is one piece of evidence of positive efforts. These products already use 92 percent local components.

According to Nangoi, this is what the government must consider. LCGCs are still a mainstay product for many people.

“The implementing guidelines have not been released yet, we'll see, it feels like it will be fine,” Nangoi then said.

Although it represents various motor vehicle manufacturers in Indonesia, Gaikindo can only hope the government's decision will not burden its members.

“I don't have the right to refuse or agree. But what is clear is that we urge for it to be decided wisely,” Nangoi explained.

TKDN Regulations

Previously, President Prabowo Subianto proposed relaxing TKDN and import regulations. This initiative was taken to respond to new regulations from the US.

Of course, this relaxation would contradict what several ministries have done in recent years.

If officially enacted, it will harm long-standing players but benefit new manufacturers. New brands from China will find it easier as they won't have to invest heavily.

“We have to be realistic; if TKDN is forced, we will end up being less competitive. I strongly agree that TKDN should just be flexible,” Prabowo Subianto stated some time ago.

Photo : Stellantis

Prabowo considers ineffective policies a hindrance to economic development and the people's welfare.

Therefore, the government plans to cut convoluted licensing procedures. So that the process going forward will be easier for business owners.

However, some parties believe that local producers will be eroded by imported goods.