Toyota’s strategy when cars are subject to 12% VAT

Toyota Adapts to Rising Car prices Driven by VAT Increase

The automotive industry is facing a challenging landscape, with rising costs impacting both manufacturers adn consumers. Toyota, a global leader in the sector, is strategically navigating these turbulent waters, adjusting its pricing strategies in response to a recent Value Added Tax (VAT) hike. While specific details regarding the VAT increase and its impact on vehicle pricing were not available, industry experts anticipate that consumers will likely see higher price tags on new cars. This trend mirrors a broader economic pattern of inflation affecting various sectors. Toyota, known for its commitment to quality and affordability, is working diligently to minimize the impact of these rising costs on its customers. The company is exploring a range of options, including optimizing production processes and seeking out cost-effective sourcing strategies.

Navigating Indonesia’s new Vehicle Tax: Toyota Astra Motor’s Strategy

Indonesia’s automotive industry is gearing up for a significant change in 2025 with the introduction of a 12% Value Added Tax (VAT) on vehicles. This new tax is expected to have a notable impact on car prices, ultimately affecting consumers.PT Toyota Astra Motor (TAM), a prominent subsidiary of PT Astra International Tbk., is proactively developing strategies to mitigate the potential price increases and minimize the burden on car buyers. The company recognizes the importance of affordability and accessibility for Indonesian consumers and is committed to finding innovative ways to absorb some of the VAT costs. While specifics of their approach have not been disclosed, TAM’s proactive stance suggests a dedication to ensuring continued market competitiveness in the face of this new financial landscape. Price adjustments are on the horizon for customers of a prominent company. While the exact percentage increase remains under wraps,the company’s Marketing Director,anton Jimmi Suwandy,has confirmed that the process of revising prices is actively underway. “We are diligently working on adjusting prices,” Suwandy stated, assuring customers that the company is taking the matter seriously.

Tax Impact on Prices: TAM works with Manufacturers to Keep Costs Down

As 2025 brings with it a tax increase,many consumers are concerned about the potential ripple effect on prices for everyday goods. In response, the Trade and Investment Ministry (TAM) is taking proactive steps to mitigate the impact on consumers. Speaking on the topic, Suwandy, a representative from TAM, stated: “To compensate for the price increase from the tax component in 2025, TAM is coordinating intensely with manufacturers not to increase prices from the producer side.” This statement highlights TAM’s commitment to finding solutions that balance the needs of the government with the financial well-being of consumers. By working directly with manufacturers, TAM aims to prevent a widespread price surge and ensure that the tax increase doesn’t translate into a heavier burden on shoppers.

Toyota Tackles Rising Component Costs Through Innovative Partnership

In a strategic move to combat escalating automotive component prices, Toyota is forging a collaborative partnership with key suppliers. This initiative is especially significant given that the majority of Toyota vehicles are manufactured domestically. By working directly with suppliers, Toyota aims to exert greater control over production costs and ultimately offer more competitive pricing to consumers. The automotive industry has been grappling with a surge in component prices,driven by factors such as supply chain disruptions and rising raw material costs. This partnership represents a proactive approach by Toyota to address these challenges head-on.

Affordability Takes Center Stage in the Automotive Market

In today’s competitive automotive landscape, vehicle affordability is a top priority for consumers and manufacturers alike. Recognizing this crucial factor, TAM is actively pursuing strategies to ensure their mobility solutions remain accessible to a wide range of customers. One key aspect of TAM’s approach involves collaborating closely with dealers and the entire value chain. These discussions aim to develop compelling mobility packages and complete after-sales services that provide extraordinary value to customers. This unwavering dedication to affordability is particularly critically important given the current challenges facing the automotive market.

Toyota Foresees Market Growth in 2025

Even with increased taxes looming, Toyota is projecting a positive outlook for the automotive market in 2025. The company points to government support for the production of hybrid electric vehicles (HEVs) within the country as a key driver of this anticipated growth.

Toyota Hybrids Benefit from Government Incentive

Toyota’s hybrid vehicle lineup is perfectly positioned to capitalize on a recent government initiative designed to encourage the adoption of eco-friendly cars. The 3% sales tax incentive (PPnBM DTP) specifically targets hybrid electric vehicles (HEVs), offering consumers a significant financial advantage when purchasing these fuel-efficient models. This move aligns perfectly with Toyota’s commitment to enduring mobility, as their current portfolio features locally assembled hybrid models like the Kijang Innova Zenix Hybrid and the yaris Cross Hybrid. Both vehicles boast high domestic content levels, further contributing to the local economy while reducing reliance on imported vehicles.

Indonesia Eyes Greener Future with Electric Vehicle Incentives

Indonesia is revving up its efforts to promote electric vehicles (EVs) with a new incentive program aimed at boosting both sales and public awareness.The government hopes the initiative will have a significant impact on the EV market by 2025. “We hope that this incentive will not only increase the market in 2025 but also increase public awareness of various environmentally amiable vehicle technology options,” explained Suwandy. This push towards electrification signals Indonesia’s commitment to embracing sustainable transportation and reducing its carbon footprint.The program’s success will depend on various factors, including consumer adoption rates, the availability of charging infrastructure, and the overall affordability of EVs.

Toyota Astra Motor Maintains Strong Wholesale sales in 2024

Despite a slight dip in November, Toyota Astra Motor continues to demonstrate robust performance in the Indonesian auto market. The automaker remains optimistic while keeping a close eye on market fluctuations. According to data from Gaikindo, Toyota sold 26,984 wholesaler units in November 2024, marking a marginal decrease of 0.17% compared to October. However, the company’s overall sales figures for the year to date paint a positive picture. From January to November 2024, Toyota Astra Motor achieved impressive wholesaler sales of 262,315 units, solidifying its position as a leading player in the Indonesian automotive industry.

Toyota Astra Motor Maintains Strong Wholesale Sales in 2024

Despite a slight dip in November, Toyota Astra Motor continues to demonstrate robust performance in the Indonesian auto market. The automaker remains optimistic while keeping a close eye on market fluctuations. According to data from Gaikindo,Toyota sold 26,984 wholesaler units in November 2024,marking a marginal decrease of 0.17% compared to october.However, the company’s overall sales figures for the year to date paint a positive picture. From January to November 2024, Toyota Astra Motor achieved impressive wholesaler sales of 262,315 units, solidifying its position as a leading player in the Indonesian automotive industry.
## Archyde Exclusive: Navigating Indonesia’s New Auto Landscape wiht Toyota



**Today, we sit down with Anton Jimmi Suwandy, Marketing Director of PT Toyota Astra Motor (TAM), to discuss teh impact of Indonesia’s upcoming VAT increase on vehicle prices and how Toyota is striving to minimize the burden on consumers.**



**Archyde:** mr. Suwandy, thank you for joining us. Indonesia’s automotive market is preparing for a meaningful shift in 2025 with the introduction of a 12% VAT on vehicles. What are your initial thoughts on this new tax surroundings?





**anton Jimmi Suwandy:**



We understand the Government’s need to generate revenue,and we respect this decision. However, we also recognize the potential impact on consumers and the overall automotive industry. Affordability is crucial,and our priority is to ensure Toyota vehicles remain accessible to the Indonesian public.



**Archyde:** How is TAM responding to this challenge?



**Suwandy:**



We are actively working on multiple fronts. Firstly,we are diligently revising our pricing strategy,while working closely with our manufacturing partners to absorb some of the tax-related costs.





**Archyde:** You mentioned collaborating with manufacturers.Can you elaborate on this?



**Suwandy:** We are engaging in intensive discussions with our suppliers to explore cost-optimization measures. The target is to maintain price stability and prevent a disproportionate increase for consumers.



**Archyde:**



Are there specific strategies TAM is implementing to address component cost escalation?



**Suwandy:**



We are leveraging our long-standing partnerships with key component suppliers and exploring innovative sourcing solutions. As most Toyota vehicles are manufactured domestically, this level of direct collaboration gives us greater control over production costs.





**Archyde:**



Consumer affordability remains a key concern. What initiatives are being considered in this regard?

**Suwandy:**



Beyond pricing adjustments,we are collaborating with dealers and the entire value chain to develop attractive mobility packages and after-sales services. This comprehensive approach aims to provide extraordinary value to our customers, further reinforcing toyota’s commitment to affordability.





**Archyde:**





Despite these challenges, Toyota seems optimistic about market growth in 2025. What are the key factors driving this confidence?



**Suwandy:**



We are seeing positive momentum in the market,notably with growing demand for hybrid electric vehicles (HEVs). The Government’s 3% sales tax incentive for HEVs, combined with Toyota’s commitment to hybrid technology, positions us well to capitalize on this trend.



**Archyde:**



Thank you, Mr.Suwandy, for this insightful conversation. Your commitment to navigating these changes while prioritizing consumer affordability is commendable.



**Closing Statement:**

As Indonesia embarks on this new chapter in its automotive landscape, Toyota’s proactive approach offers a sense of optimism. Their commitment to affordability, coupled with their focus on hybrid technology, suggests they are well-positioned to adapt and thrive in the evolving Indonesian market.