Gaikindo Awaits 2026 Automotive Incentives: Consumer Stimulus Key to Recovery
JAKARTA — Indonesia’s Association of Automotive Manufacturers (Gaikindo) is still awaiting confirmation of the government’s automotive incentive policy for 2026.
Gaikindo’s chairman, Putu Juli Ardika, stated that the association has already communicated with the government regarding the need for stimulus to maintain purchasing power in the domestic automotive market.
However, to date, decisions regarding the form of incentives to be provided remain under discussion.
According to Putu, stimulus in the automotive sector can be directed in two ways: towards vehicle manufacturers (upstream) or consumers as vehicle buyers (downstream).
However, in the current market conditions, incentives are considered more effective if focused on consumers to maintain vehicle price affordability.
“The stimulus can actually be divided into two categories: for manufacturers (upstream) and for vehicle buyers (downstream). But what is currently most feasible to provide is for consumers,” said Putu.
He explained that the automotive industry has already received several investment facilities, such as tax holidays and various other fiscal incentives.
Therefore, policies that directly target buyers are considered to have greater impact on vehicle demand.
Putu added that the tax instruments in Indonesia’s automotive sector are relatively numerous compared to other countries, so there is still room for adjustment through fiscal policy.
On the other hand, Putu noted that various previous government stimulus programmes had proven capable of boosting the automotive market, particularly through tax incentives that directly reduced vehicle prices at the consumer level.
Beyond maintaining purchasing power, stimulus is considered to play a role in encouraging the growth of new energy vehicle (NEV) market, including battery electric vehicles.
“With government stimulus, the market began to favour vehicles like battery electric vehicles. Besides being more environmentally friendly, the operational costs are also cheaper,” Putu said.
“Initially it was not easy because many people were uncertain. But now the public is beginning to see that the operational costs are more economical, so they are becoming more interested. We must sustain this momentum,” he added.
Several automotive incentives expired on 31 December 2025, including the full exemption of import duties on pure electric vehicles, 10 per cent VAT for electric vehicles, and government-subsidised luxury goods sales tax (PPnBM) of 3 per cent for hybrid vehicles.
Meanwhile, Minister of Industry Agus Gumiwang Kartasasmita previously revealed that the government has submitted automotive sector incentive proposals for the 2026 fiscal period to the Minister of Finance.
“For the automotive sector, we have already sent stimulus incentive proposals to the Finance Minister,” Agus said.