Jakarta. Indonesia’s automotive industry group has called on the government to step up support for the sector as Malaysia’s new car sales continue to close in on Indonesia’s long-held lead in Southeast Asia’s largest auto market.

The Indonesian Automotive Industry Association (Gaikindo) said government incentives are crucial to sustaining competitiveness, especially as sales growth slows.

“This is where the government’s role becomes crucial. In the short term, incentives -- similar to those offered during the pandemic -- are needed,” said Gaikindo Secretary General Kukuh Kumara, as quoted by state news agency Antara on Sunday.

Malaysia Narrowing the Gap
Malaysia sold 816,747 vehicles in 2024, a figure that came close to Indonesia’s total of 865,723 units, according to Gaikindo. Analysts note Malaysia’s sales trajectory has been steadily catching up with Indonesia in recent years.

Data from the ASEAN Automotive Federation (AAF) shows that Indonesia still led in vehicle sales between January and May 2025, with retail sales at 390,467 units. However, this marked a decline from the same period last year.

Wholesale figures -- sales from manufacturers to dealers -- also dropped 8.6 percent to 374,740 units in the first five months of 2025, down from 410,020 units a year earlier.

Kukuh warned that the downward trend should serve as a wake-up call for both the government and the industry.

“The gap with Malaysia is narrowing. Without strategic action, it is not impossible that Indonesia could be overtaken,” he said.