President Joko Widodo, Jokowi, in a recent statement, emphasized Indonesia’s competitive edge in the global landscape, particularly within the automotive sector’s future trajectory. He expressed optimism about the nation’s potential and urged for the localization of all electric car manufacturing processes already established in Indonesia.
Speaking at the Indonesia International Motor Show (IIMS) 2024 at JIExpo Kemayoran, Central Jakarta, on Thursday (15/2/2024), President Jokowi highlighted the importance of incentivizing local production.
He noted, “We are currently incentivizing through VAT reductions. This move is expected to not only bolster sales but also encourage the establishment of electric car factories within Indonesia.”
The government has taken steps to facilitate the purchase of electric vehicles domestically, with provisions extending from 2023 until the end of 2024. These incentives, outlined in Minister of Finance Regulation (PMK) No. 38 of 2023, aim to support specific categories of electric motor vehicles.
Under this regulation, the government offers a 10 percent reduction in Value Added Tax (VAT) for electric vehicle sales, effectively reducing the VAT rate to just 1 percent upon purchase.
President Jokowi emphasized the importance of local assembly, stating, “Competing with other nations becomes feasible when all components, including batteries, are locally sourced and assembled.”
The ongoing Indonesia International Motor Show (IIMS) for the year 2024, which commenced on February 15th and runs until February 25th, showcases a diverse array of automotive brands from across the globe. Among the prominent participants are manufacturers from Japan, South Korea, China, Vietnam, and Europe.
The exhibition features an impressive lineup of four-wheeled vehicles, including models from renowned brands such as Toyota, Hyundai, Honda, Suzuki, Mitsubishi, BYD, and the emerging VinFast brand. Additionally, the motorcycle segment boasts the presence of industry leaders like AHM, Peugeot, Royal Enfield, Yamaha, Utomo Corp, Alpha, Polytron, and the premium BMW Motorrad brand.
