Title: Indonesia‘s Auto Industry Unfazed by PPN Hike; Government Boosts Hybrid Sales with Fiscal Incentive
Indonesia’s automotive industry remains resilient, with the Gabungan Industri Kendaraan Bermotor Indonesia (Gaikindo) expressing optimism despite the recent 12% Pajak Pertambahan Nilai (PPN) increase. Gaikindo’s Chairman, Jongkie Sugiarto, noted that the industry has weathered similar tax hikes in the past, with growth continuing within its established corridor.
Toboost the automotive industry’s growth, the Indonesian government has implemented a 3% fiscal incentive for hybrid electric vehicle (HEV) purchases at the start of 2025. This measure has further bolstered Gaikindo’s confidence in the industry’s positive trajectory. In 2024 alone, the combined market share of battery electric vehicles (BEV) and HEV reached 11.6%.
The government’s initiative to promote low-carbon emitting vehicles (LCEV) continues, with existing incentives for BEV imports and plans to extend these to HEVs. Kebijakan insentif for Kendaraan Bermotor listrik & hybrid is expected to enhance the competitiveness of these vehicles in the domestic market.
P ਉਸIK otomotif and academic from Institut Teknologi Bandung (ITB), Yannes Martinus Pasaribu, advised Gaikindo to actively promote the benefits of eco-friendly vehicles to consumers and encourage producers to increase HEV and BEV production and affordability. He also suggested collaborating with local governments to ensure a varied range of PKB and BBNKB(options) that won’t burden consumers.
Gaikindo anticipates that the 12% PPN increase will not negatively impact sales, as seen in previous years. The industry body expects to achieve its target of selling up to one million vehicles. To stay updated on Indonesia’s automotive industry, keep an eye on Gaikindo’s progress and forecasts.
Related reading