Executive Summary

Key insights and market outlook

Indonesia's automotive industry experienced a 9.6% decline in car sales to 710,084 units in Jan-Nov 2025 compared to the same period last year ¹

⁴. The government is proposing new incentive schemes for 2026 to boost the sector, with more detailed criteria based on technology and local content ³. The Ministry of Industry projects full-year sales will be below 800,000 units, with monthly sales averaging 60,000-70,000 units.

Full Analysis

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Deep Dive Analysis

Indonesia's Automotive Sector Faces Challenges in 2025

Declining Sales Trend

Indonesia's automotive industry experienced a significant decline in 2025, with car sales reaching 710,084 units during January-November, representing a 9.6% drop compared to 785,917 units in the same period last year ¹

⁴. The Ministry of Industry projects that the full-year sales will likely fall below the 800,000 unit mark, based on current monthly sales averaging between 60,000 to 70,000 units ¹.

Government Response and Proposed Incentives

In response to the declining sales, the Ministry of Industry has submitted proposals for new incentive schemes to the Ministry of Finance to boost the automotive sector in 2026 ¹

. Minister of Industry Agus Gumiwang Kartasasmita revealed that the proposed incentives will be more detailed and targeted compared to previous general stimulus packages, particularly during the COVID-19 pandemic ³. The new incentives are expected to focus on specific segments, technologies, and local content requirements (TKDN).

Industry Challenges and Future Outlook

The automotive industry is currently navigating through a challenging phase, with the electric vehicle (EV) segment still in its early growth stage. Economic expert Ibrahim Assuaibi emphasized the need for careful consideration before removing existing incentives for EVs, as the market is still developing and manufacturers are determining appropriate consumer segments and pricing strategies ²

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