automotive

LCGC Incentives Continue Until 2031

Minister of Industry Agus Gumiwang Kartasasmita met with three top automotive manufacturers on the sidelines of the World Expo 2025 in Osaka, Japan, last week. One of them was Suzuki Motor Corporation Chairman Osamu Suzuki. 

First, he received a heartfelt outpouring regarding the significant decline in light commercial vehicle sales in Indonesia. Osamu Suzuki expressed his concern over the declining market conditions, believing it could impact their flagship products, such as the Suzuki Carry. 

However, the company stated its commitment to supporting the Indonesian market and welcomed the Minister of Industry's directive not to lay off employees. 

Minister of Industry Agus Gumiwang responded by stating that the government is evaluating various policies to stimulate demand for commercial vehicles, including through regional government purchases and fiscal incentives for MSMEs. 

Meanwhile, Toyota Motor Corporation also conveyed important aspirations to the Minister of Industry during the meeting. TMC requested a relaxation of the Domestic Component Level (TKDN) regulations for hybrid vehicles. 

Currently, several Toyota hybrid variants, such as the Kijang Innova Zenix Hybrid and Yaris Cross, have achieved a local content content (TKDN) of over 40 percent. However, they proposed more flexible local content (TKDN) regulations for electrified vehicles. This would attract investment and accelerate the adoption of environmentally friendly technologies. 

Minister of Industry Agus Gumiwang welcomed the proposal and stated that the government is open to discussing selective TKDN relaxation. He then promised to maintain the direction of domestic industrialization policy. 

"We will study this request. In principle, we want to build a strong national automotive industry that is also globally competitive," he said in an official statement. 

Agus Gumiwang also confirmed that the Low Cost Green Car (LCGC) incentive program will continue until 2031. This aims to maintain vehicle affordability for the public and support a gradual transition to electrification. 

"The LCGC program has proven successful in increasing public vehicle ownership and also supporting the national automotive industry. Therefore, we will continue the incentives for LCGCs until 2031," he added. 

This statement is expected to provide long-term certainty for industry principals and players, namely, to continue producing and developing energy-efficient vehicles domestically. 

It's no secret that the national automotive industry is not doing well. Purchasing power is weakening due to hampered economic growth. 

The Importance of Collaboration 

The Ministry of Industry also emphasized the importance of collaboration between the government and automotive principals, especially in facing the electrification transition, global challenges, and maintaining a balance between local production and exports. 

Tag: Agus Gumiwang Kartasasmita LCGC Osaka World Expo 2025