automotive

Indomobil: The Automotive Industry In 2025 Is Fraught With Challenges

The CEO of PT Indomobil National Distributor, Tan Kim Piauw, stated that the Indonesian automotive industry will face significant challenges in 2025 due to the implementation of a 12 percent Value Added Tax (VAT). 

"In 2025, the challenges will indeed be formidable, considering the aforementioned factors. Fortunately, this situation is not unique to us; all automotive players in Indonesia will experience it," Tan Kim Piauw remarked during a Media Gathering event in Jakarta on Wednesday. 

In addition to the 12 percent VAT, which is viewed as a national issue that could disrupt the domestic automotive industry, the introduction of additional optional taxes may indirectly diminish consumer purchasing power in the coming year. 

To address these challenges, the company will continue to implement programs focused on enhancing the driving experience for its customers in Indonesia through the Comfort Experience Challenge Drive. This initiative has proven effective in providing driving experiences to consumers who may not be fully aware of the advantages of the vehicles marketed by Citroen in Indonesia. 

"First and foremost, as I mentioned earlier, we will continue to promote the Citroen customer experience. The more people become familiar with Citroen products, the better," he added. 

Meanwhile, Citroen Indonesia has achieved remarkable success in 2024. Throughout this year, the French automotive manufacturer has successfully established 22 official dealerships and 13 Citroen Experience Centers. 

As previously noted, President Prabowo Subianto confirmed on December 6, 2024, that the 12 percent VAT will be implemented at the beginning of 2025, in accordance with the law. However, the enforcement of this tax policy will be carried out selectively. 

According to the President, the VAT increase will only apply to luxury goods. Coordinating Minister for Economic Affairs Airlangga Hartarto indicated that the specifics of luxury items subject to the 12 percent VAT will be further regulated in a Minister of Finance Regulation. 

Tag: Automotive Industry Indomobil Value Added Tax