Indonesia lead export cars to Vietnam and surpasses Thailand as the major supplier, the customs office reported on Friday (07/03) - Photo by President Office

JAKARTA (TheInsiderStories) – Indonesia lead export cars to Vietnam and surpassed Thailand as the major supplier, the customs office reported on Friday (07/03). In the first five months of the year, the Southeast largest economy was exported 15,074 units or 53 percent of 28,523 imported cars to the neighboring country.

The office said, Thailand came second with 37 percent, losing the top place it has been enjoying since 2016. In total, both countries account for 90 percent of Vietnam’ passenger car imports.

It said, the passenger car imports fell 40 percent compared to same period in 2019 as domestic demand dwindled and factories in Thailand and Indonesia were shut down to contain of the COVID-19 pandemic. Imports of car parts also fell 19.6 percent to US$1.3 billion.

Indonesian government is targeting to export 1 million cars by 2025 from this year target around 400,000 units. Therefore, the government is determined to create a conducive business climate through harmonization and synchronization of regulations in the automotive sector.

By 2030, the country also targeting to become the production base for both Internal Combustion Engine 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.

Currently, Indonesia produced 1.1 million cars every year. During January to May, Indonesia’ car sales slumped by 95.8 percent to 3,551 units in May compared to same month in 2019 still recorded 84,109 units, said the association. Based on the official data, the amount was the lowest level in a decade.

When compared to April, this sales fell 54 percent, which had sold 7,868 units and also dropped 90.6 percent compared to April 2019 was carried 84,056 units. Compared to March, the auto sales also dropped badly, decreased by 89.7 percent. In March the car sales still recorded 76,811 units.

The car maker association (GAIKINDO) reported, the country’ largest distributor PT Astra International Tbk (IDX: ASII) still become major seller during last month (1,208 units). Then Mitsubishi sold 919 units, Suzuki 779 units, Honda 101 units, Nissan 57 units, and others 593 units.

According to the chairman, Yohannes Nangoi said, the biggest factor on the sharp attenuation was caused the four-wheel were not the primary needs of the people in the current COVID-19 pandemic. Earlier, the association has revised down the auto sales from initially 1.03 million units to 600,000 units due to virus impact.

This endless outbreak caused several car manufacturers to temporarily halt the production caused the low supply of raw materials for the next few months.

To support the automotive industry, recently industry minister, Agus Gumiwang Kartasasmita said, his office has proposed an economic stimulus to press the COVID-19 impact in Indonesia. This policy was made to maintain the performance of the industry’ contribution to the national economy.

“Although there are automotive manufacturers whose production has been disrupted due to COVID-19, we ensure the availability of products and parts for motor vehicles,” said director at the ministry of industry, Putu Juli Ardika on April 8.

According to him, his office has proposed fiscal, non-fiscal, and monetary stimulus to the related ministry and agencies on the new policies. In detail, the fiscal stimulus is in the form of incentives income tax for six months, value added tax refunds also for six months, and a reduction in import duties.

“Non-fiscal stimulus is given in the scheme of simplifying or reducing export and import for raw materials, accelerating the export-import process for reputable traders, and simplifying the import-export process through NLE (National Logistic Ecosystem),” he explained.

Written by Staff Editor, Email: theinsiderstories@gmail.com