The Indonesian automotive industry faces challenges this year as declining demand for new vehicles has forced a sales target revision from 1.1 million units to 850,000 units. Yohannes Nangoi, Chairman of Gaikindo, stated that all automakers are feeling the impact, with concerns that difficulties may persist into next year due to potential tax hikes. Factors such as high-interest rates and plans to raise taxes, including an increase in Value-Added Tax (VAT) from 11% to 12%, and vehicle registration fees, are seen as hurdles to growth. Nangoi emphasized that these changes could significantly affect the price-sensitive automotive sector.
Minister of Industry Agus Gumiwang Kartasasmita acknowledged the industry's struggles, highlighting its critical role in Indonesia's economy. To address these challenges, the government is formulating incentive programs aimed at revitalizing the sector. Kartasasmita noted that the planned incentives would mitigate the impact of regulatory measures, including the Motor Vehicle Title Transfer Fee (BBNKB) regulated under Law No. 1 of 2022, which has negatively affected sales. This initiative aims to sustain the industry's contribution to economic growth amidst current market conditions.
