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Driven by PPnBM Incentives, the Automotive Trade Sector Grew 12% in 2021

Viva Budy Kusnandar 05/04/2022 14:30 WIB

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According to the Indonesian Central Statistics Agency (BPS), the automotive (cars and motorcycles) sales and repair sector grew by 12.1% from 2020, reaching Rp262.22 trillion in 2021.

Value and Growth of GDP in the Automotive, Motorcycle, and Repair Sector (2010-2021)

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Driven by PPnBM Incentives, the Automotive Trade Sector Grew 12% in 2021

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Value and Growth of GDP in the Automotive, Motorcycle, and Repair Sector (2010-2021)

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The gross domestic product (GDP) of the car, motorcycle, and repair trade sector at current prices reached Rp407.88 trillion in 2021.

This figure accounts for 18.54% of the GDP of the wholesale and retail trade sector, which totaled Rp2.2 quadrillion.

Measured in terms of GDP at constant 2010 prices, the car, motorcycle, and repair trade sector grew by 12.1% year-on-year to Rp262.22 trillion in 2021.

This achievement is better than 2020, which experienced a contraction of 1.31%.

The sector's growth in 2021 exceeded its pre-pandemic growth rate and was the highest in the last 11 years.

This sector's growth is also inseparable from the policy of sales tax on luxury goods (PPnBM) reduction incentives that applied from March to December 2021.

The PPnBM reduction of up to 100% during this period caused wholesale car sales (sales from the sole agent brand holder to the showroom) to surge by 66.4% in 2021 compared to the previous year.

Similarly, retail car sales (sales from showrooms to buyers) increased by 49.14% in 2021.

PPnBM Incentives Continue in 2022

Automotive PPnBM incentives will continue in 2022, but with different tax reduction rates.

Based on the Minister of Finance Regulation Number 5/PMK.010/2022, there are two car segments that receive government-borne PPnBM.

First, the low-cost green car (LCGC) segment with prices below Rp200 million. For this LCGC segment, the PPnBM reduction will be 100% in the first quarter, then a 66.66% discount in the second quarter, and a 33.33% discount in the third quarter of 2022.

Second, the car segment with an engine capacity of up to 1,500 cc and a price range of Rp200-250 million. This segment will receive a 50% PPnBM discount in the first quarter of 2022.

"With the extension of the 2022 PPnBM DTP incentive, it will maintain the momentum of growth in the national automotive industry while increasing the utilization and performance of the automotive component industry sector, including MSMEs," said Minister of Industry Agus Gumiwang Kartasasmita in his press statement on Tuesday (January 18).

Editor : Adi Ahdiat

"Disclosure: This is an AI-generated translation of the original article. We strive for accuracy, but please note that automated translations may contain errors or slight inconsistencies."