Domestic auto sales stagnate, Industry Ministry offers stimulus needed

Domestic car sales stagnate, Ministry of Industry: Stimulus needed
A number of visitors pass by a row of used cars for sale at the WTC Mangga Dua Car Exchange, Jakarta, Friday (29/3/2024).

The MINISTRY of Industry (Kemenperin) said that sales of cars in the domestic market had tended to stagnate at one million units over the past decade. According to the acting director general of the metal, machinery, transport equipment and electronics industry (Ilmate) Putu Juli Ardika, strategic steps are needed to increase sales by introducing incentive measures.

“There is a need for a program to encourage the purchase of new cars in the community. The step we can take is to provide tax incentives for domestically produced vehicles,” Putu said in an official statement quoted as saying on Thursday (Sept 7).

These incentives are given to automakers who produce vehicles with a certain level of domestic components (TKDN) and give priority to vehicle types with low CO2 emissions. Apart from that, support related to controlling interest rates can be a step to give the public a trigger or incentive to buy new four-wheeled vehicles.

The Ministry of Industry noted that sales of two-wheeled vehicles in the domestic market will reach 6.2 million units in 2023, and exports will reach 570 thousand units. Meanwhile, exports of automobiles amounted to 506,000 units of completely built-up (CBU) or vehicles imported directly from the country of origin in an intact state, and 65,000 units of completely rebuilt (CKD) cars or imported vehicles that were not fully assembled. .

Putu explained that, citing a study by academics from the University of Indonesia’s Institute of Economic and Community Research (LPEM), the stagnation of car sales in Indonesia was influenced by a decline in people’s purchasing power, causing people who could not buy new cars to switch to buying used cars. Therefore, he continued, it is necessary to relax interest rates for buying new cars on credit. (Z-2)

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