Jakarta (Indonesia Window) – The Indonesian Ministry of Industry has said that the country becomes the production base and export hub of the German automotive industry with Mercedes Benz Indonesia having been able to produce the most luxurious sedan model of Mercedes-Benz line-up.

That shows Indonesia’s automotive industry has been trusted as a production base for motorized vehicles ranging from low, middle to premium and luxury classes.

"The growing middle class, the demographic bonus, the penetration of digital technology, as well as the increasing trend in the use of new and renewable energy, will become a catalyst for the transformation of the national motor vehicle industry towards zero emission technology," the Ministry’s Director General of Metal, Machinery, Transportation Equipment and Electronics, Taufiek Bawazier, said here on Sunday (Nov. 28).

He underscored that Indonesia was ready to enter the zero emission era technology under the Presidential Regulation Number 55 of 2019 concerning the Acceleration of the Battery Electric Vehicle (BEV) program for road transportation.

In addition, the Government Regulation Number 74 of 2021 states that vehicles with zero emission technology such as BEV and Fuel Cell Electric Vehicles (FCEV) that are produced domestically, will be given a Luxury Goods Sales Tax rate of 0 percent.

"The government encourages Mercedes Benz to make Indonesia a hub for exporting motorized vehicles, both conventional and electrical to the global market," Taufiek said.

Currently, the automotive industry in Indonesia is able to be competitive in the global arena, as can be seen from the number of four-wheeled vehicles or more, including their components, exports.

In the 2021 January-September period, exports of CBU (completely built up) vehicles were 207,000 units with a value of 37.65 trillion rupiahs (some 2.6 billion U.S. dollars), 62,000 sets for CKD (completely knock down) with a value of 0.96 trillion rupiahs (some 66.5 million U.S. dollars), and 65 million components with a value of 21.86 trillion rupiahs (some 1.5 billion U.S. dollars).

Indonesia's automotive export destinations have reached more than 80 countries.

"In order to attract investment from low-volume motor vehicle manufacturers, especially from Europe, we have issued the Industry Ministerial Regulation Number 23 of 2021 concerning Four-wheeled Motor Vehicles or More," Taufiek noted.

The regulation simplifies the requirements for CKD vehicles and decomposition as well as IKD (incompletely knock down) vehicles, besides giving convenience for the import of secondary components for production purposes (shortage, mistake and reject) subject to the SNI (the Indonesian National Standard) mandatory.

Meanwhile, Mercedes Benz Indonesia’s President Director Patrick Schwind said that in 2020 the company will be 50 years operating in Indonesia with passenger and commercial motor vehicles produced at the Wanaherang factory, in Bogor district, West Java province.

Mercedes Benz Indonesia officially launched its two newest models, the E-Class and S-Class, which were produced at the Wanaherang factory in Bogor district.

The New E-Class and New S-Class set the highest standards in their respective segments and complete line-up model assembled locally, among others the A-Class and C-Class of the luxury sedan, GLA, GLC, GLE, and GLS of the SUV (sport utility vehicle) segment, as well as the AMG A 35 Sedan and AMG GLA 35 4MATIC for performance cars.

“The company is committed to continuing to operate in Indonesia for the next 50 years and more. This commitment is implemented through the continuous addition of domestically assembled models, including the launch of the E Class and S Class,” he said.

These effort is expected to bring about positive impacts to utilization, investment expansion, employment, and production of automotive components.

In addition, the domestic assembly would strengthen Mercedes Benz's brand image and customer loyalty in Indonesia, as well as provide added value for the development of the automotive industry in the country.

Reporting by Indonesia Window