Denying Airlangga's Claim, The Ministry Of Industry Insists On Incentives For The Automotive Sector, There Are Still 2026

Spokesperson for the Ministry of Industry Febri Hendri Antoni Arif (intermediate)

The Ministry of Industry (Kemenperin) emphasized the need for fiscal incentives for the national automotive industry in 2026, following a previous statement from Coordinating Minister for the Economy Airlangga Hartarto who said the industry was strong enough and would not receive incentives next year.

Previously, Coordinating Minister for Economic Affairs Airlangga Hartarto revealed that no incentives would be given to the automotive industry next year.

"Next year's incentives don't exist because the industry is strong enough, especially since there is already this exhibition (GJAW)," he told reporters at ICE BSD, Wednesday, November 26.

The Ministry of Industry assesses that the main indicator of the automotive industry, namely domestic sales of cars produced domestically, are experiencing a sharp decline. Incentives are considered crucial to maintain factory utilization, protect investment, and prevent mass layoffs (PHK).

Spokesperson for the Ministry of Industry, Febri Hendri Antoni Arif, stated that there was an error if he considered the automotive industry to be strong only based on growth in certain segments, especially electric vehicles (EVs).

"The sharp decline in sales of four-wheeled motorized vehicles is far below the production figure when sales of imported EV vehicles rose sharply is an unavoidable fact and must be an indicator of the current growth of the national automotive industry. We view that incentives are needed to reverse the situation," Febri said in a written statement, quoted Monday, December 1.

Based on data from the Ministry of Industry, there has indeed been a severe weakening in the segment which is the backbone of national production. Sales of Wholesales (Jan-Okt 2025) were only 634,844 units, down 10.6 percent on an annual basis (yoy) compared to 711,064 units in the same period last year.

In addition, vehicle production fell from 996,741 units (2024) to 957,293 units (2025). The deepest decline occurred in segments targeting middle-low consumers, consisting of:

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On the other hand, although EV sales increased significantly (a total of 69,146 units in 2025), 73 percent of them were imported EVs. This condition means added value, production and absorption of labor are abroad.

Febri also denied the claims of Coordinating Minister Airlangga regarding the many exhibitions showing a strong industry. According to the spokesman for the Ministry of Industry, many exhibitions are actually efforts and industrial struggles to maintain the demand side in the midst of falling domestic sales and protecting workers from layoffs.

"Once again, we have to use existing statistical data to describe the objective conditions of the automotive industry today and not use the number of automotive exhibition events," explained Febri.