Improving The National Automotive Industry, The Government Encourages An Increase In The Local Content Of Electric Motor Vehicles

Coordinating Minister for Economic Affairs Airlangga Hartarto (left). (Photo: Doc. Coordinating Ministry for the Economy)

JAKARTA - The national processing industry recorded growth of 4.64 percent (yoy) in 2023 and became one of the major contributors to national economic growth with a share of 18.67 percent (yoy) of GDP in 2023.

Meanwhile, the transportation equipment industry itself grew 7.63 percent (yoy) with a national GDP contribution of 1.49 percent.

The contribution of national automotive product exports was also quite significant by growing 5.96 percent (yoy) in 2023, an increase compared to 2022 which was 5.14 percent (yoy).

The national automotive industry is able to cumulatively print sales of 4 or more wheeled motorized vehicles for 2023 of 1,005,802 units.

Meanwhile, based on data from Gaikindo, it was recorded that throughout 2023 domestic sales of electric cars reached 17,147 units and exports of electric cars amounted to 1,504 units.

Meanwhile, sales of hybrid cars throughout 2023 reached 54,656 units and exports of hybrid cars amounted to 27,710 units.

"I see this is a good event and many are being exhibited, including electric cars. This is for the future of Indonesian automotive," said Indonesian President Joko Widodo in his official statement, Thursday, February 15.

Jokowi said that Indonesia has nickel raw materials and so on for electric vehicle (EV) batteries, so that in the future it will be more driven by the production and sale of the EV.

"The direction there is that we will be able to compete with other countries, especially if all local content has increased. We encourage nickel so that all EV brands can produce in Indonesia, because we have power in their batteries," Jokowi explained.

Coordinating Minister for Economic Affairs Airlangga Hartarto said a number of incentives had also been issued by the Government to accelerate investment and implementation of Battery-Based Electric Motor Vehicles (KBLBB) in Indonesia.

Such as the Import Duty incentives for imports of 4-wheeled KBLBB of 0 percent, either in full or Completely Built Up (CBU) or completely Knocked Down (CKD), as well as PPnBM incentives for 4-wheeled KBLBB to accelerate investment in the 4-wheeled KBLBB industry in Indonesia.

Airlangga expressed his appreciation for the automotive industry in Indonesia which has succeeded in increasing exports by 100 percent.

This great potential must be utilized in order to be able to compete with other countries.

"However, we are still losing to Thailand, so we want to push again so that exports will be higher and increase every year," said Airlangga, who was also present to accompany President Jokowi.

Airlangga said, IIMS 2024 provides exclusive space for the automotive industry to innovate and display its superior products.

In IIMS 2024, the theme Your Infinite Autotainment Experience was followed by at least 53 vehicle brands and 188 participants.

With a total target of IIMS 2024 transactions estimated at IDR 5.3 trillion by presenting around 460 thousand visitors for the period 15-25 February 2024.

"Hopefully this event will run smoothly and spur the Indonesian automotive industry to be more proactive and progressive in creating innovative products by prioritizing local products," Airlangga concluded.