Exports Will Still Increase, Automotive Market Is Predicted To Grow In 2025

Exports (Between)

JAKARTA - Director of the Production Balance of the Central Statistics Agency, Puji Agus Kurniawan, said that the growth of the automotive market in Indonesia could still grow in 2025, in line with the growing demand for exports.

Through the presentation given to the 'Forwot Cars/Motorcycles of the Year 2024' activity, he explained that although in the midst of domestic challenges such as the existence of 12 percent VAT and also additional tax levies in several regions, the automotive industry can still continue to grow.

"Exports for motorized vehicle products and spare parts except for motorbikes tend to have a positive trend of reaching USD 2.57 billion in Q3-2024," he said, quoting Antara.

However, for two-wheeled, three-wheeled products and equipment in the data they display still tend to have fluctuating trends for the same period.

However, he believes that the automotive industry still has strong enough passion for the years to come, although there is a relatively small increase in taxes.

"Now our VAT is 11 percent, so if tomorrow is 12 percent, I think those who want to buy a vehicle will not be too dizzy, because it will increase by 1 percent," he said.

Meanwhile, the government has also committed to providing solutions so that the automotive industry continues to be enthusiastic through providing incentives. Such as providing incentives for battery-based electric vehicles (BEV) to hybrid electric vehicles (HEV).

In this case, the government has set an incentive policy for hybrid vehicles through PPnBM DTp of 3 percent. This policy is also intended to increase sales of hybrid type vehicles in Indonesia following the increase in VAT by 12 percent next year.

Other incentives also the government provides 10 percent VAT DTP for imports of electric car vehicles completely knocked down (CKD), PPnBM DTP for imports of electric cars completely built up (CBU) and also CKD of 15 percent and also free import duty for CBU electric cars.

To note together, the government has officially set an increase in Value Added Tax (VAT) rates to 12 percent starting January 1, 2025.

Coordinating Minister for Economic Affairs Airlangga Hartarto said the determination of VAT was 12 percent in accordance with Law (UU) Number 7 of 2021 concerning Harmonization of Tax Regulations (HPP).