automotive

Automotive Investment Reaches IDR 31.7 Trillion, With BKPM Concentrating On Attracting Foreign Capital

The Investment Coordinating Board (BKPM) has reported a significant growth in investments within the automotive sector up to September 2024. During a discussion titled "Prospects for the Automotive Industry 2025 and Government Incentive Opportunities," the Director of Investment Deregulation at BKPM, Dendy Apriandi, announced that the total incoming investment reached IDR 31.7 trillion. "This figure represents a 43 percent increase compared to 2019, when it was only IDR 11.04 trillion," Dendy stated in Jakarta on Tuesday, January 14, 2025. 

Foreign Direct Investment Dominance   

Dendy detailed that the investments comprise foreign direct investment (FDI) amounting to IDR 28.15 trillion and domestic investment (DI) totaling IDR 3.6 trillion. Japan has emerged as the largest contributor with a total investment of IDR 75 trillion from 2019 to 2024, followed by South Korea with IDR 44.25 trillion, Singapore with IDR 5.5 trillion, Hong Kong with IDR 3.59 trillion, and China with IDR 1.04 trillion. 

Focus on Electric Vehicles   

The majority of investments have been directed towards the automobile industry, amounting to IDR 107 trillion, followed by two- and three-wheeled vehicles at IDR 16.7 trillion, and electric vehicle batteries at IDR 22.1 trillion. To stimulate investment in this sector, BKPM is preparing various incentives, including tax holidays, tax allowances, and exemptions from import duties for electric vehicle investments. The issuance of Presidential Regulation No. 79 of 2023 is also a key strategy for the government. This regulation provides incentives such as exemptions from import duties and a 0 percent luxury goods sales tax (PPnBM) for battery-based electric vehicles (KBLBB) with a certain level of domestic component utilization (TKDN). 

In addition to incentives, the government is promoting vocational education to develop a skilled workforce that meets the needs of the automotive industry. Regulations are continuously being refined to create a competitive investment climate. "These measures are being implemented to ensure that Indonesia becomes a hub for the automotive industry, particularly in electric vehicles, with global competitiveness," Dendy remarked. 

Tag: Automotive BKPM Investment Coordinating Board