Japanese Carmakers Pledge to Avoid Layoffs and Price Hikes in Indonesia Amid Global Uncertainty

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JAKARTA, Investortrust.id – Toyota, Daihatsu, and Suzuki have pledged to keep vehicle prices stable and avoid layoffs in Indonesia, following a direct request from Industry Minister Agus Gumiwang Kartasasmita amid growing concerns over global economic volatility.

The minister met with executives from the three Japanese automotive giants at the Indonesian Pavilion during the World Expo 2025 in Osaka on Thursday, July 11. He urged them not to raise prices or reduce their Indonesian workforce to help maintain domestic purchasing power and economic stability.

"I have explicitly asked that there be no vehicle price increases and no layoffs in Indonesia. This is crucial to protect consumer purchasing power and safeguard jobs in the automotive sector, which is a pillar of our national industry," said Agus in a statement on Saturday, July 12.

The companies responded positively, expressing their understanding of the Indonesian government’s concerns and committing to maintaining both prices and employment levels despite global headwinds.

Strategic Sector, Massive Workforce

Indonesia’s automotive industry employs over 99,000 workers and is considered one of the country’s most strategic industrial sectors. The government has promised to support the sector’s sustainability through deregulation and fiscal incentives.

During the meeting, Agus emphasized that maintaining an attractive and competitive domestic market is essential. He noted that sustained cooperation between the government and major car manufacturers is key to industrial continuity and worker welfare.

"The Indonesian auto market holds vast potential. We cannot afford to lose momentum due to rising prices or mass layoffs that could trigger a domino effect," he said.

According to data from the Ministry of Industry, the four-wheeled vehicle segment in Indonesia is supported by 32 manufacturers, with an annual production capacity of 2.35 million units and a workforce of 69,390 people. Investment in this segment has reached Rp 143.91 trillion ($8.83 billion).

The two- and three-wheeled segment includes 73 manufacturers with a combined annual production capacity of 10.72 million units. This segment employs 30,310 workers and has attracted Rp 30.4 trillion ($1.87 billion) in investment.

From January to May 2025, production of four-wheeled vehicles reached 459,000 units, with domestic sales at 316,000 and exports of completely built units (CBU) totaling 192,000. Over the same period, the two- and three-wheeled segment produced 3.37 million units, sold 3.1 million locally, and exported 268,000 CBU units.

Concerns Over Commercial Vehicle Sales

In his discussion with Suzuki Motor Corporation, Agus was informed of a sharp decline in light commercial vehicle sales in Indonesia, a key concern for the company. Chairman Osamu Suzuki specifically cited a downturn affecting the popular Suzuki Carry model.

Despite these challenges, Suzuki reaffirmed its commitment to the Indonesian market and welcomed the government’s call to avoid layoffs.

Agus assured Suzuki that the government is reviewing measures to stimulate demand, including local government procurement programs and fiscal incentives aimed at small and medium-sized enterprises (SMEs).