Jakarta – Coordinating Minister for Economic Affairs Airlangga Hartarto stated Wednesday that the Indonesian automotive industry will not receive government incentives in the coming year. This announcement comes after minister of Industry Agus Gumiwang Kartasasmita indicated the government was actively developing incentive plans for the sector.
“There will be no (automotive) incentives next year,” Airlangga told journalists at the GJAW 2025 event held at ICE-BSD City, Tangerang.
Airlangga justified the decision by highlighting the current strength of the Indonesian automotive industry,citing the robust presence of both national and international automotive exhibitions.”As the industry is already quite strong. Moreover, it has exhibited here. Very strong,” he added.
While acknowledging the ongoing discussion regarding potential incentives, Airlangga clarified, “It is still being studied (the plan to provide automotive incentives). It is indeed being studied, but there is no (decision) yet.”
This statement contrasts with Minister Agus Gumiwang Kartasasmita’s earlier comments emphasizing the automotive industry’s importance to Indonesia‘s economy.Agus stated the sector is a national mainstay and that incentives are “a necessity” due to its significant backward and forward linkages within the manufacturing landscape. He confirmed the government was preparing incentive options for 2026, without detailing their specific form.
The Ministry of Industry reports the automotive sector is a key contributor to Indonesia’s Gross Domestic Product (GDP) manufacturing, exports, and employment, with estimated investment reaching approximately IDR 174 trillion and employing nearly 100,000 workers across the four-wheeled, two-wheeled, and three-wheeled vehicle industries.
(lua/lth)
