Sales Forces Aka Car Sales Smile When Seeing Vehicle Order Form Increasing Due To Free Taxes

Honda's production facility in India. (Photo: By courtesy)

JAKARTA - The government's move to impose an exemption from Sales Tax on Cheap Goods (PPnBM) for new cars of 0 percent in early March has brought immediate results. Brand Holder Sole Agent (ATPM) claims their sales skyrocketed immediately compared to the previous period.

PT Suzuki Indomobil Sales (SIS) Marketing Director Donny Ismi Saputra revealed that during the four days of the PPnBM relaxation, the demand for Suzuki cars increased 100 percent compared to the same period in February 2021.

"So far, from the data we have monitored, demand for Suzuki cars has increased by 100 percent," he said in a statement last week.

Donny added that Suzuki has two models that get 0 percent PPnBM relaxation. The two models are the Suzuki Ertiga and Suzuki XL7.

"We estimate the increase in sales for the two models is around 20 percent. But it could continue to grow," he said.

Likewise, Marketing Director of PT. Mitsubishi Motors Krama Yudha Sales (MMKSI) Irwan Kuncoro said that his party found an increase in the number of orders after the incentive was released, especially two products that received PPnBM incentives, namely Xpander and Xpander Cross.

"The number of SPK in the first week of March 2021 has increased quite significantly for Xpander, when compared to the same period in February 2021," he said.

The same thing happened to PT Toyota Astra Motor. Through Marketing Director Anton Jimmy, the Japanese automotive giant said that the company's product sales had increased significantly. This can be seen from the total vehicle purchase letters (SPK) issued.

"From March 1-8, 2021 data, for Avanza, Sienta, Rush, and Yaris, the SPK increased by around 94-155 percent when compared to the SPK for the February period on the same date," he explained.

Anton added, for the Vios type, which received the biggest discount of up to IDR 65 million as a result of this incentive, sales increased even more because previously there was not much demand.

"The increase is very much thanks to the relaxation policy issued by the government," he added.

The increase in SPK also occurred in Honda car sales. Business Innovation and Sales and Marketing of PT. Honda Prospect Motor, Yusak Billy, revealed that the sales increase was around 40-50 percent compared to the same period the previous month.

"Especially for models that get tax incentives, the increase is up more than 60 percent compared to the first week of February, the highest growth is at HRV of 1.5 liters," he said.

Billy revealed that public interest is very good in taking advantage of tax relaxation from the government.

"We will continue to observe the development of car demand in the future to meet the existing demand," he said.

Investment attractiveness

The government's efforts to encourage the national automotive industry to return to work in the pandemic era bore fruit. Apart from increasing sales, the relaxation of taxation has made this sector even sexier for investors to look to.

Quick steps were taken by the Minister of Industry (Menperin) Agus Gumiwang Kartasasmita by visiting Japan, which is the headquarters of various world-class car manufacturers.

During an official visit for two days last week, the Minister of Industry seduced a number of principals to invest in the country.

Minister Agus conveyed new policies, programs, and projects, including the Job Creation Law, import-substitution, relaxation of Sales Tax on Luxury Goods (PPnBM), the Bintuni project, and Patimban. Like a tit for tat, the Minister of Industry brought 'souvenirs' in the form of strengthening old investment and new investment commitments in the automotive sector amounting to tens of trillions of rupiah.

"The meeting went well and brings good news because several large automotive and petrochemical companies have declared their commitment to invest in Indonesia," he said in Tokyo, Japan, Thursday, March 11 before leaving for Indonesia.

He added, from a meeting with the principals of Honda Motor Company. Ltd., the company was committed to investing IDR 5.2 trillion.

Meanwhile, Suzuki Motor Corporation plans to invest IDR 1.2 trillion. Then, Toyota Motor Corporation realized the existing investment, which was around IDR 28 trillion, and Mitsubishi Motors Corporation submitted an investment plan of IDR 11.2 trillion.

Previously, the Minister of Industry also lobbied Mazda Motor Corporation to build a factory in Indonesia by conveying various investment conveniences and many incentives for new automotive investors in Indonesia.

"We continue to encourage them to immediately invest and build factories in Indonesia. They will immediately consider and calculate for investment needs in Indonesia. Hopefully later on our next visit in May we can hear about Mazda's progress in investing in Indonesia,” he said.

Electric car

The PPnBM relaxation policy indirectly opens up opportunities for realizing the development of the domestic electric car industry. After Tesla's strong commitment to partnering with Indonesia in the electric car battery supply chain, now is Honda's turn to include Indonesia in the radar for making vehicles with 4.0 technology.

This positive signal was issued by the Minister of Industry, Agus Gumiwang Kartasasmita. He said the company would relocate its production facilities from India to Indonesia along with an investment commitment of IDR 5.2 trillion.

"Honda is committed to developing electric cars in the country," said Agus.

Not only that, but the Suzuki manufacturer also conveyed the same request to pioneer the development of electric vehicles in Indonesia after agreeing to invest in the capital of IDR 1.2 trillion starting this year.

The company claims to have a roadmap for developing an electric vehicle (EV) and says that the incentives and policies of the Indonesian government are very much in line with Suzuki's vision and mission in the future.

"As a first step, they will introduce a mild hybrid type of vehicle with integrated starter generator (ISG) technology for export for the Asian and Latin American markets," concluded the Minister of Industry.