The Government Fully Supports Automotive Industry, President Jokowi Says
Date 2 Agustus 2018
President Joko Jokowi Widodo reminded to beware of short term cycle in automotive industry that starts to show its impact on big markets in the US and China.
All of us must understand that automotive industry has its cycles which are responsive to economic cycle, the President said at the opening of the 26th Gaikindo Indonesia International Auto Show (GIIAS) in ICE, BSD, Tangerang, Banten, Thursday (2/8).
The Head of State explained that a lot of researchers say that car sales in the US has reached its peak and it is predicted that the next few years, the number will decrease.
So, we must be ready to deal with this condition when global automotive industry slows down in the upcoming years. However, we must be also optimistic that our market is big, the President said.
On various occasions, the President always encourages automotive industry to penetrate export markets, given the fact that this industry plays a great role in economy. It is the second biggest sector in processing industry and among top five of investment sources in industrial sector, the President further said.
Therefore, President asserted that the Government will fully help and support automotive industry. The Government is currently preparing a number of incentives for this industry, such as tax holiday, tax allowance, and super deduction.
Regarding super deduction, the President explained that companies expenses for activities like vocational training can be deducted up to 200 percent from taxable income (PKP).
The number will be big, but the Ministry of Finance is still studying it. Automotive industry must also have courage to get out of its comfort zone. Be careful, it is difficult sometimes to get out of our comfort zone. The President said while reminding all doers in this industry to work hard and create innovations.
Innovation of AMMDes
On that occasion, President Jokowi also appreciated an innovation of a vehicle called the Rural Multipurpose Mechanical Tool (AMMDes). There are more than 70 domestic industries ready to supply the AMMDes components.
I am also very happy that our automotive industry grows well. This industry exported 231 thousand units of CBU (Completely Built Up), and 8.1 million automotive components last year. This industry is now at rank four of top 25 non oil and gas export sectors during Januari to June 2018 which value reaches US$3.45 billion, the President added.
In his remarks, the President also reminded that at the moment Indonesia really needs to fully implement biodiesel B20 in all sectors. Therefore, he asked all parties to fully support the implementation so that biodiesel substitution for our local products can be maximally executed.
With crude oil assumption of US$70 per barrel and, the President has calculated that the use of B20 will raise the price of palm oil up to US$100 per ton.
If the implementation runs well, the Government can boost its foreign exchange. Thus, the President will monitor this matter and asked commitment of all parties to help the implementation of B20. In 1970, Brazil managed to implement 100 percent bioetanol for vehicles which made of local cane sugar; how can a country that produces million tons of palm oil cannot implement the policy? the President further said.
Also present on this event were Cabinet Secretary Pramono Anung, Minister of Industry Airlangga Hartarto, and Minister of Villages, Disadvantaged Regions, and Transmigration Eko Putro Sandjojo.(DND/EN) (MMB/YM/Naster)