Indonesia's Industry Minister Wants Car Companies to Cut Prices to Boost National Purchasing Power

The Minister of Industry suggested that automakers reduce the selling price of their vehicles to increase consumers' purchasing power, and Chinese automaker BAIC said it would be difficult to reduce prices further as it does not make much profit from selling cars in Indonesia because of the taxes it has to pay at the initial stage of importation in addition to the production costs.However, BAIC often offers special promotions for its products, such as a discount of up to 70 million dong for the BAIC X55-II produced last year to stimulate sales. The industry minister also wants producers to engage in consumer- and environment-oriented innovations, which the government will continue to support. According to the Indonesian Automotive Industry Association (IAIA), last year's total wholesale sales of automobiles were 865,723 units, down 13.9% year-on-year, while retail sales were also down 10.9% to 889,680 units, which is down but has exceeded the revised target of 850,000 units.