August 5, 2026 | 07:09 am
TEMPO.CO, Jakarta - Indonesia may offer incentives to Toyota Motor Corp. if the Japanese automaker relocates its main vehicle production hub from Thailand to Indonesia, Finance Minister Purbaya Yudhi Sadewa said.
The move would support Indonesia's ambition to become a global automotive manufacturing base while strengthening domestic supply chains, he said at the 2026 Gaikindo Indonesia International Auto Show in Tangerang, Banten.
"We will support Toyota, but they must bring their main manufacturing operations from Thailand to Indonesia. We will provide all required incentives," Sadewa said on Tuesday, August 4, 2026.
The minister also urged Toyota to move its supporting industries to Indonesia, noting that many materials and components used by local automakers remain imported.
Steel, electronics and chemical products are among key inputs that Indonesia still sources from overseas, he said.
"If you bring your supporting industries here, we will provide sufficient, or even greater, incentives," Sadewa added.
Indonesia's automotive industry currently employs about 1.5 million workers and produces around 2.5 million vehicles annually, according to the minister.
Sadewa said the government would improve the investment climate and prepare incentives for automotive companies willing to relocate production facilities.
"Perhaps we previously did not provide enough incentives to foreign investors, or our investment climate was not mature enough. We will seriously improve it," he said.
Separately, Sadewa said President Prabowo Subianto would soon announce incentives for around 500,000 electric motorcycles and cars within the next two to three weeks.
The incentives will include a luxury goods sales tax exemption of up to 100 percent and a 40 percent government-borne value-added tax reduction for vehicles meeting certain requirements.
The measures will apply only to battery electric vehicles (BEVs), while hybrid and plug-in hybrid electric vehicles (PHEVs) will not qualify, Sadewa said.
"There will also be a slight difference in incentives between nickel-based and lithium-based battery EVs," he said, adding that President Prabowo would announce the final details.
The government aims to accelerate electric vehicle adoption while attracting investment in Indonesia's automotive ecosystem through targeted fiscal support, Sadewa said.
Read: Why Purbaya Wants Toyota to Move Its Thai Factory to Indonesia
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