Minister of Industry Airlangga Hartarto Visited One of the Participants of Telkomsel Indonesia International Motor Show 2019 in Jakarta - Photo: Ministry of Industry Office

JAKARTA (TheInsiderStories) – Indonesian government aiming to export 400,000 units car in this year. The number higher 15.6 percent compared to the 2018 with total export 346,000 units or rose 14.4 percent from previous year.

Industry minister Airlangga Hartarto reveasled, the planned is in line with the growing demand from Southeast Asian countries (ASEAN) and the opening of new markets such as in Australia. After signed the comprehensive economic cooperation agreement between the two countries last March, the potential car exports to the kangaroo country has been opened, including an electric vehicle.

“But, the ASEAN market is still very potential. Now, become Indonesia’ largest car exports, including Philippines and Vietnam. Even the market in Thailand is also starting to open,” he said in Jakarta, last week.

Hartarto is targeted that by 2030, Indonesia become the production base for both Internal Combustion Engine (ICE) and Electrified Vehicles for domestic and export markets. The government expect, 20 percent of the total production of new vehicles in Indonesia already use electric power by 2025.

“This is to support the commitment of the Indonesian Government to reduce greenhouse gas emissions by 29 percent by 2030, while maintaining national energy independence,” said the minister.

Currently, the automotive industry has been able to produce domestic raw materials such as steel, plastic, glass, tires. With this opportunity, the country has potential to use local content above 80 percent, he stated.

Hartarto explained, there were four major automotive companies that had made Indonesia as a global supply chain. This, he continued, will boost the performance of the automotive industry and be able to make a significant contribution to the national economy.

“In the near future, there will be several automotive principals who will join and will make Indonesia an automotive manufacturing hub in the Asian region,” added by him.

Furthermore, he said, to support the development of the Low Carbon Emission Vehicle, the government prepares fiscal incentives in the form of a tax holiday or mini tax holiday. The incentives delivered for the main component industries, such as the battery industry and the electric motor industry (magnets and motor coils).

“Then, we have also proposed super deductible tax incentives of up to 300 percent for industries that carry out Research &Development and design activities, and 200 percent for industries involved in vocational activities,” Hartarto stated.

In addition, the government also proposed special arrangements relating to Import Duty and other taxation including Regional Taxes to accelerate the development of the electric vehicle industry in Indonesia.

Hartarto added, the LCEV development policy was also supported by national banks, including PT Bank Rakyat Indonesia Tbk (IDX: BBRI), which had launched the Electrified Vehicle Credit Vehicle program on April 15.

“With an interest rate of 3.8 percent per year with a tenor of up to six years, it is expected that the public can begin to switch to using low-emission vehicles while supporting the creation of national energy security,” he said.

Ministry data showed the potential of the automotive industry in Indonesia is quite large, with the number of car production reaching 1.34 million units, or US$13.76 billion throughout 2018.

Written by Daniel Deha, Email: daniel@theinsiderstories.com

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