Since the COVID-19 declared a dangerous epidemic and needed special attention by the World Health Organization (WHO) on December 31, 2019, it caused a deterioration in the economy around the world. This also causes a decline in industrial growth in Indonesia, one of which is the automotive industry.

Based on the data from Statistics Indonesia (BPS), in 2020, the automotive industry experienced negative growth of -19.86% (y-o-y). Some of the factors that contributed to this decline were the COVID-19 pandemic which caused a decrease in demand for vehicles and the cessation of several automotive factories and their derivative products in Indonesia. In addition, the obstruction of the import supply process from several countries has also become an obstacle during the pandemic in 2020. Performance in the automotive sector is predicted to recover in two years or in early 2023. Based on the growth data of the last few years and several other factors, VISI predicts that in 2021 the growth of the automotive industry will improve to around -9%. Indeed, it is still growing negatively, but it can be seen that there is an increase in several production activities and business expansion which again shows progress towards a better direction. There are 3 sectors that also influence the development of the automotive industry, namely the commodity sector, logistics sector, and construction sector (infrastructure). If the three sectors improve in 2021, it is certain that they will have a positive impact on the growth of the automotive industry.

In addition, in March 2021, the Ministry of Finance of the Republic of Indonesia will implement a 0% PPnBM policy or relaxation of sales tax for luxury goods. This policy is stated in the Minister of Finance Regulation (PMK) No.20PMK.010/2021 concerning PPnBM for the Delivery of Luxury Taxable Goods in the form of Certain Motor Vehicles Borne by the Government for Fiscal Year 2021. With this relaxation (originally 10%) the selling price of cars under 1,500 cc is much cheaper so it is the best moment for vehicle users to buy a new car. Since the policy was implemented, there has been an escalation in car purchases by an average of 140.8%. This is expected to be effective not only in stimulating the automotive sector (especially automobile) but also for the national economy and the plan is to increase it for cars over 2,500 cc.

However, this turned out to have a negative impact on entrepreneurs selling used vehicles. With the relaxation of the PPnBM tax, the price of new cars is much cheaper. This condition will change the customer’s view where they choose to buy a new car rather than a used car.

Based on the collected information, used-car businesses think that the 0% PPnBM policy can pose a little threat to the used-car business, but on the other hand, it can also be an opportunity to increase the volume of used-car sales in the future. (Source: www.otomotif.kompas.com)

Based on the production volume, in 2020 there was a decrease in production volume by 596,698 units or a decrease of 46.37% (yoy) from the production volume in 2019. Where the peak of the decrease occurred in May 2020, namely down by 100,832 units or down 97.57% compared to production volume in May 2019.

Meanwhile, based on import and export activities, there was a significant decrease in imports of Completely Built-Up (CBU) products and automotive component and part products. Based on data from the Association of Indonesian Automotive Industries (Gaikindo) in 2020, there was a decrease in the volume of imported CBU products by 52% and automotive components and part products by 47% compared to 2019. The decrease was caused by difficulty in obtaining access and products from several countries. suppliers due to the lockdown policy in the midst of COVID-19 pandemic in 2020. Several countries which become the origin of imports, namely Thailand, Japan, Germany, South Korea, India, China, Malaysia, Spain, Sweden, and UK.

The decrease also occurred in the export volume, but not as big as the decrease in import volume. There was a decrease in exports of CBU products by 30%, Completely Knock Down (CKD) set products by 89%, and Component and part products by 16%. These products are exported to more than 20 countries in the world, such as Thailand, Japan, Germany, Qatar, Oman, Saudi Arabia, Bangladesh, Laos, South Korea, India, China, Malaysia, Spain, Sweden, UK, and others.