automotive

Gaikindo Raises Concerns Over TKDN Relaxation, Warning That The National Automotive Industry Could Collapse

The Chairman of the Indonesian Automotive Industry Association (Gaikindo), Yohanes Nangoi, responded to President Prabowo's suggestion regarding the relaxation of the Domestic Component Level (TKDN) policy.  

"Our automotive industry has been developed over several decades. We do not want to see this industry collapse; we will coordinate with the government on this matter," Nangoi stated during an event in Jakarta this week.  

He emphasized that the national automotive sector has evolved over many years, giving rise to numerous Micro, Small, and Medium Enterprises (MSMEs) that supply components to various vehicle manufacturers operating in Indonesia.  

"For instance, vehicles like the Agya and Ayla are produced with 92 percent local components. This should certainly be a consideration for the government, although the implementation guidelines have not yet been released. We will monitor the situation, and it seems manageable," Nangoi explained.  

He clarified that his organization does not have the authority to accept or reject President Prabowo's proposal, which is currently just a recommendation. However, he expressed hope that any decisions made would be beneficial.  

Investments in the automotive sector are substantial, with many companies investing hundreds of billions to tens of trillions of rupiah to contribute to the nation.  

Recently, during an Economic Forum in Jakarta, President Prabowo Subianto called for a more flexible TKDN policy to make it more realistic for businesses to incorporate imported goods into their production processes. He is committed to prioritizing deregulation, particularly to simplify the complex licensing processes involved in export and import activities. 

Tag: Gaikindo National Automotive TKDN Relaxation Yohanes Nangoi