The Ministry of Industry (Kemenperin) has emphasized the urgent need for targeted incentives to strengthen the national automotive ecosystem, aiming to protect domestic investments and ensure workforce stability across the value chain.
Ministry Spokesperson Febri Hendri Antoni Arief highlighted a concerning trend within the sector. While electric vehicle (EV) sales surged in 2025, approximately 73% of these units were imported, offering minimal contribution to local value creation or labor absorption. Conversely, sales of domestically produced vehicles—the backbone of the national industry—have experienced a significant decline. Data from Gaikindo reveals a 10.6% year-on-year drop in wholesale numbers between January and October 2025.
"It is misleading to gauge the industry's strength solely on specific segment growth or the frequency of automotive exhibitions," Febri stated. He clarified that the current proliferation of auto shows represents the industry's proactive struggle to stimulate demand and prevent mass layoffs, rather than a sign of robust market health.
To address this disparity, Kemenperin advocates for policy interventions that go beyond merely boosting consumption. The proposed incentives are designed to maintain production utilization and enhance the competitiveness of locally made products against imports. By prioritizing the domestic supply chain, the Ministry aims to reverse the current downturn and ensure the long-term sustainability of the sector and its workers.
