Welcoming The Giving Of Hybrid Incentives, Gaikindo: The Automotive Market Can Return To Excitement In 2025

The atmosphere of the automotive exhibition in Indonesia in 2024. (Photo: Sevent Event)

JAKARTA - The Association of Indonesian Automotive Industries (Gaikindo) welcomes the fiscal incentive policy of 3 percent for hybrid vehicles, which will take effect from January 1, 2025.

General Chairperson of Gaikindo Yohannes Nangoi expressed his appreciation to the government for paying great attention to the performance of the motor vehicle industry in Indonesia.

"Gaikindo really appreciates this policy as a quick response to maintaining the continuity of the motor vehicle industry in Indonesia, which is experiencing pressure due to various things," he said, in an official statement received, Tuesday, December 24.

He further revealed that the issuance of a hybrid incentive policy is good news, which is expected to be able to restore and revive the motor vehicle industry in Indonesia.

In addition, he also said there was confidence that the policy would be one of the factors to encourage a significant return of market passion, in 2025.

As is known, the government also continues to provide incentives for pure electric vehicles (BEV), namely 10 percent VAT DTP incentives for imports of electric cars completely knocked down (CKD), as well as PPnBM DTP for imports of electric cars in full or completely built-up (CBU) and CKD of 15 percent, as well as exemption from import duties for CBU electric cars.

Gaikindo also revealed a combination of BEV and HEV sales from January to November 2024, which is claimed to be able to achieve a market share of 11.6 percent. With the policy of providing incentives for BEV-based motorized vehicles and the latest policy for providing fiscal incentives for hybrid vehicles, it is a step for the Indonesian government to encourage the competitiveness of these vehicles in order to increase their penetration in the national market.

The steps taken by the government are also said to be able to eliminate concerns from motor vehicle industry players about the risk of increasing Value Added Tax (VAT) to 12 percent by 2025.

"The positive policy of the government builds confidence for the Indonesian motor vehicle industry, that the increase in value added tax or VAT to 12 percent on January 1, 2025, will not have a negative impact on potential sales," he concluded.