PPnBM Incentive For Motor Vehicles Saves The Automotive Industry, Gaikindo: Thanks To The Government

JAKARTA - The Association of Indonesian Automotive Industries (Gaikindo) said that the government-borne Sales Tax on Luxury Goods (PPnBM) incentive policy has proven to have saved the Indonesian automotive industry. The reason is, automotive sales in 2020 had experienced great pressure due to the COVID-19 pandemic.

General Chairman of Gaikindo, Yohannes Nangoi, explained that sales in the April-June 2020 period were 7,868 units, 3,551 units, and 12,623 units respectively. While the implementation of PPnBM incentives in March 2021, sales rose to 80 thousand units.

"Thanks to the government for the relaxation of PPnBM, because with this initiative the automotive industry can be saved and grow again", he said in a virtual press conference, Thursday, April 19.

Based on Gaikindo's sales data for the January-July period, car production was recorded at 588,881 units, up 49.4 percent from the same period last year, wholesales 460,105 units, up 40.8 percent, and exports of completely built-up (CBU) cars of 166,069 units which rose 38.2 percent.

Meanwhile, new car sales of 460,105 units in the January-July period are also close to full-year sales in 2020 which amounted to 532,027 units. Thus, the car sales target throughout 2021 of 750 thousand units is likely to be achieved.

According to Nangoi, the relaxation of PPnBM will not only benefit car sales figures but will also stimulate the automotive industry at large. For example, with this incentive, the company will again create jobs due to the increasing demand for new cars.

"The automotive industry is back on track, so we can proudly say that there have been no layoffs of employees, perhaps the contracts have expired. On the other hand, some are looking for new employees", he said.

Then, he continued, the relaxation of PPnBM will also improve export performance. Because Indonesia produces several types of cars for foreign markets, including Toyota, Daihatsu, Mitsubishi, and Suzuki.

"Exports are improving again, hopefully, it can reach 300 thousand units", he said.

Not only that, according to Nangoi, the government's income has also increased due to an increase in sales volume, so that government income can be increased, especially in the regions. For this reason, Gaikindo hopes that the relaxation of PPnBM can be extended until the end of 2021.

"It is hoped that PPnBM will last until the end of 2021 so that the automotive industry will recover completely", he explained.