These Incentives Can Help Boost National Car Sales

KatadataOTO – The government has issued a number of policies in the automotive sector to help boost sales and accelerate the adoption of environmentally friendly vehicles. There are incentives for electric cars to hybrids.

However, it is undeniable that environmentally friendly vehicles, especially BEVs (Battery Electric Vehicles), are still priced relatively high.

In fact, the purchasing power of the majority of Indonesians is in the Rp 200 million range. One type of vehicle with that price tag is the LCGC (Low Cost Green Car).

Popular among consumers, including first-time buyers, the LCGC also boosted sales when the automotive industry was sluggish due to the pandemic in 2020. At that time, the government provided an incentive in the form of a zero percent PPnBM (Luxury Goods Sales Tax).

Photo : KatadataOTO

The PPnBM percentage increased over time. Looking at the current automotive conditions, observers believe that the zero percent PPnBM program specifically for LCGCs could be reinstated.

“Looking at the conditions, incentives are indeed very necessary, the LCGC PPnBM,” said Josua Pardede, Chief Economist of Permata Bank, responding to a question from KatadataOTO on the sidelines of IIMS 2025, Tuesday (18/2).

Especially considering the wholesale figures for four-wheeled vehicles throughout 2024, which were below 900 thousand, missing the initial target of one million units.

“If we look at the sales side, retail sales have been below one million (units) since 2023,” said Josua.

Meanwhile, car prices continue to creep up, coupled with an increase in VAT (Value Added Tax) to 12 percent. Then, a tax surcharge was implemented in several regions, not including Jakarta.

The good news is, Josua explained that many regional governments are providing relief, so the PKB (Motor Vehicle Tax) and BBNKB (Vehicle Title Transfer Fee) figures are actually lower.

In addition, the existence of supporting incentives in the vehicle segment that match the public's purchasing power can contribute to increasing national car sales this year.

Photo : KatadataOTO

“I think this will be very significant in driving or boosting automotive sales,” he emphasized.

For your information, there are several LCGC models marketed domestically. For example, the Honda Brio Satya, Toyota Agya, Calya, Daihatsu Ayla, and Sigra.

These four are often the choice for first-time car buyers because their prices are more affordable. Although when the VAT increase first took effect, the price of one of the models reached Rp 200 million.