Source: CNNIndonesia.com | July 24, 2025

Minister of Industry Agus Gumiwang Kartasasmita stated that Indonesia is experiencing a difficult economic period, resulting in low purchasing power, which is impacting the automotive industry. However, he stated that this situation is only a passing phase and that the automotive industry will recover.

“This is what I’ve said from the beginning: we see this as a transitional period, and we are very optimistic that this is only a passing phase, only for a short time,” Agus said at the opening of the 2025 Gaikindo Indonesia International Auto Show (GIIAS) in Tangerang on Thursday (July 24).

“The Indonesian economy will soon recover, the market will soon be visible, and when that momentum arrives, we hope the automotive industry will be ready to soar. With stronger, more efficient, and of course, highly competitive progress,” he added.

He believes the domestic automotive industry is strong due to the policy regarding the use of local content (TKDN). He believes TKDN strengthens the cost structure, opens opportunities for the development of the domestic component industry, and reduces dependence on imports.

Agus said the Ministry of Industry commends the Association of Indonesian Automotive Industries (Gaikindo) for organizing GIIAS. The country’s largest annual automotive exhibition is considered a national commitment to supporting Indonesia.

“Under the ministry, we greatly appreciate Gaikindo’s proven strategic and trusted partner for the government, both during difficult times, such as COVID-19, and beyond,” said Agus.

He also emphasized the importance of maintaining a stable business climate so that the automotive sector remains a mainstay for job creation in Indonesia.

“We, the government, are committed to creating a stable business climate, including through policies aimed at maintaining affordable prices and ensuring that the manufacturing sector, particularly the automotive industry, remains a key sector for sustainable job creation,” he said.

No Layoffs Order

Agus also emphasized that there should be no layoffs during this recovery period. He conveyed this directly to industry players.

“This is the order, Sir, and I have also conveyed it to automotive industry players when I met, that there should be no layoffs, no layoffs. This is an order from the government,” he said.

The government, Agus continued, will also strengthen policies that encourage the use of domestic components as part of its long-term strategy. “As part of the long-term strategy, the government will strengthen policies aimed at increasing the motivation to use domestic components in the production process,” he emphasized.