Indonesia Automotive Industry Needs Fiscal Incentives

The Ministry of Industry, represented by spokesperson Febri Hendri Antoni Arief, said on 3 December 2025 that Indonesia’s automotive sector needs fiscal incentives. The sharp decline in domestic four‑wheel vehicle sales is the key indicator of industry health. Incentives are intended to boost competitiveness, keep factories utilized, and protect investment and jobs.

Gaikindo data show wholesale sales from factories to dealers fell 10.6 % to 634,844 units in January‑October 2025, while retail sales to consumers dropped 9.6 % to 660,659 units. The entry‑level segment with on‑the‑road (OTR) prices below IDR 200 million fell 40 %, the low‑MPV segment (IDR 200‑400 million) fell 36 %, and commercial vehicles fell 23 %. The decline coincides with a surge in imported electric‑vehicle sales.

Febri expects fiscal incentives to lower vehicle prices, making them affordable for lower‑middle‑income buyers, with eligibility tied to local content (TKDN) values. Such measures aim to stimulate production, revive the market, and sustain the national automotive industry.