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Car sales surge 70% after luxury tax cut
Nearly 85,000 cars were sold domestically in March, up 72.5 percent from the previous month, after a luxury tax cut came into effect in Indonesia.
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Lines of vehicles pack kilometer 6 of the Jagorawi Toll Road in Jakarta on Oct. 30, 2020. (Antara/Hafidz Mubarak)
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omestic car sales skyrocketed in March as a luxury tax (PPnBM) cut for small cars came into effect, but overall sales remained below prepandemic levels, meeting observers’ expectations about the effect of key incentives on consumer spending.
Nearly 85,000 cars were sold domestically in March, up 72.5 percent from the previous month and up 10.5 percent from March of last year, according to data from the Association of Indonesian Automotive Manufacturers (Gaikindo).
Some consumers decided in March to buy a new car, while others made purchases they had delayed from February – when the incentive was announced – to take advantage of the savings.
Despite the growth, only 187,021 cars were sold in the first quarter of 2021, compared to last year’s first-quarter sales of 236,890.
“The government’s PPnBM relaxation helped increase car sales in March,” Gaikindo chair Yohannes Nangoi told The Jakarta Post on Tuesday. “Hopefully, car sales will continue to increase all year.”
The government offered the tax cut in an effort to boost consumer spending and help the economy recover.
Read also: Tax cuts for new cars, houses come into effect
