The Association of Indonesia Automotive Industries reported the car sales in August 2020 rose 47 percent to 37,277 units from July sold 25,283 units - Photo by GAIKINDO Office

JAKARTA (TheInsiderStories) – The Association of Indonesia Automotive Industries (GAIKINDO) reported the car sales in August 2020 rose 47 percent to 37,277 units from July sold 25,283 units. But on an annual basis, the August sales still fell 58 percent from August 2019, which had penetrated 90,568 units.

The organization said, the impact of the pandemic is still overshadowing car sales. Based on GAIKINDO data, in August, Toyota and Suzuki still dominated the market, with 8,740 units and 6,829 units, respectively followed by Daihatsu 6,651 units, and Mitsubishi which made sales of 4,867 units.

According to PT Astra International Tbk (IDX: ASII), the company car sales in June to August, began to increase. The number of car sales rose to 16,773 units from last July’ sold 10,140 units and when compared to August 2019, the sales reached 46,944 units.

“Astra and national car sales in the last three months (June – August 2020) have slowly increased. We hope that this recovery will continue, thus contributing to national car sales,” said Astra’ head of corporate communications, Boy Kelana Soebroto, in a press statement released on Tuesday (09/15).

To support the automotive industry, currently, industry ministry has proposed the relaxing of the luxury tax for automotive products to finance ministry. This effort is expected to stimulate the market and at the same time encourage the growth of the automotive sector in the midst of a pandemic.

“We have proposed the zero percent tax until December 2020,” said minister of industry, Agus Gumiwang Kartasasmita, in an official statement, early of this week.

He expects, with the cut taxes could boost the people’ purchasing power and to recover the automotive sales that had fallen during the pandemic. Earlier, chairman of GAIKINDO, Jongkie Sugiarto, asked  the government to issue a number of stimuli to help the industry.

The reasoned, he said, the Jakarta, which contributes up to 40 percent of national sales, will experience a total Large-Scale Social Restriction (PSBB) starting Sept. 14. He asserted, “We have asked for a stimulus that directly affects the selling price of cars, we are still waiting for the government’s decision.”

Even, there are an increased in monthly sales of new cars during July and August, said Sugiarto, the figures are still far from reaching normal conditions. For that, he believed the necessary of the cut of the existing taxes and make the car prices more cheaper.

He gave an example, provision of stimulus, as has been done by several neighboring countries, was able to boost the car sales. In Malaysia, for example, the stimulus is a 100 percent sales tax exemption for locally assembled models and 50 percent for completely built-up models, from June 15 to Dec. 31, 2020.

In May, GAIKINDO mentioned three proposals as a stimulus for automotive sales, like motor vehicle tax relief 30 to 50 percent eases the import tax for export purposes also no minimum use for electricity and gas fuel costs and transactions using Rupiah instead of Dollars. Furthermore, looseness in the permit extension process, and optimization of installed production capacity as well as asking the principal to move orders.

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