Jakarta. Industry Minister Agus Gumiwang Kartasasmita has called on Indonesia's automotive industry to refrain from laying off workers despite mounting challenges in the market.

“Even during the far more severe pressures of COVID-19, there were no layoffs. Now, with these extraordinary challenges, layoffs must still be avoided,” Agus said on Friday.

The automotive industry directly employs 38,000 workers and supports over 1.5 million jobs throughout its supply chain. Agus specifically appealed to the Association of Indonesian Automotive Industries (Gaikindo) to sustain employment levels. So far, there have been no reports of layoffs in the sector despite weak sales.

The sector is under significant pressure as market demand wanes, forcing Gaikindo to revise its 2024 car sales target from 1.1 million units to 850,000 units. Despite the challenges, the government continues to view the automotive industry as a key pillar of the national economy.

Agus underscored the importance of large-scale auto exhibitions like the Gaikindo Jakarta Auto Week (GJAW) in boosting sales and helping the industry recover. “In these tough times for our automotive market, this event can hopefully spur a rebound in sales,” he said.

Indonesia’s automotive market showed signs of recovery in October, with car sales rising 6.22 percent month-on-month to 77,191 units, the highest figure this year, according to car distributor Astra International. However, sales remain below the 80,350 units recorded in October 2023.

Year-to-date, the industry has sold 710,406 cars, significantly lower than the 1.05 million units sold by October last year. Research by MarkPlus indicates that rising car prices, which have increased by 37 percent over the past decade, are outpacing household income growth of 28 percent, further straining affordability for consumers.

On Friday, Agus inaugurated the 2024 GJAW, running from November 22 to December 1 at ICE BSD City in Tangerang, Banten. The event features over 80 exhibitors, including 27 passenger car brands, 12 motorcycle brands, and more than 40 supporting industry players.