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Car sales may still lag in 2025 despite tax incentive on hybrid vehicles
The incentives, announced on Monday, will partially waive luxury sales tax (PPnBM) for hybrid car purchases by 3 percentage points to a range of 3 to 9 percent from the initial 6 to 12 percent.
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The All New Yaris Cross HEV, a hybrid car from Japanese manufacturer Toyota, is seen in an undated photo. (Toyota Astra Motor/-)
T
ax incentives for hybrid car purchases are expected to only provide a limited boost to overall car sales next year with analysts saying it will remain difficult to go beyond the 1-million-unit mark hoped by the industry.
The incentives, announced on Monday, will partially waive luxury sales tax (PPnBM) for hybrid car purchases by 3 percentage points to a range of 3 to 9 percent from the initial 6 to 12 percent.
Industry Minister Agus Gumiwang Kartasasmita said during the announcement that it would only apply to locally manufactured cars with a specific level of local content (TKDN).
The waiver was made public when the government revealed multiple incentives to cushion the impact of the value added tax (VAT) hike from 11 to 12 percent.
Eko Cahyanto, secretary-general of the Industry Ministry, explained on Wednesday that the stimulus was aimed at supporting the sluggish performance of the automotive industry.
The auto industry only sold 784,788 units of new cars from January to November this year, a 14.7 percent drop compared with the same period last year, according to data from the Association of Indonesian Automotive Manufacturers (Gaikindo).
Over the past decade, new car sales in Indonesia have only fallen below the 1-million-unit mark during the pandemic in 2020 and 2021.
