Indonesia Reviews Automotive Incentives Amid Industry Strength

Government's Mixed Signals on Support Measures

The Indonesian government is currently assessing potential incentives for the automotive industry, despite earlier statements suggesting that no new incentives will be introduced in 2026 ¹

. Minister Airlangga Hartarto indicated that the industry is considered sufficiently robust to operate without additional support, highlighting the successful staging of the Gaikindo Jakarta Auto Week (GJAW) 2025 as evidence of its strength.

Current Incentive Structure and Future Prospects

Currently, the automotive industry receives support through Value Added Tax (VAT) subsidies for electric battery-based vehicles and certain bus categories until 2025. Airlangga emphasized that while there are no plans for new incentives, the government is open to reviewing the situation. Minister Agus Gumiwang Kartasasmita suggested that various incentive options are being studied, although no final decisions have been made.

Industry Performance and Government Confidence

The Gaikindo Jakarta Auto Week (GJAW) 2025, held at the ICE BSD in Tangerang, demonstrated the industry's resilience and growth potential. Airlangga noted that the success of such events shows the industry's strength, potentially reducing the immediate need for government incentives. However, the ongoing review indicates that the government remains cautious and open to supporting the industry if needed.