Jakarta. The Indonesia Automotive Industry Association, or Gaikindo, has criticized the government for renewing a regulation that allows companies to import used trucks, saying it would worsen business conditions in a market that's already struggling to maintain growth.
In December, the Trade Ministry issued a regulation on the import of secondhand capital goods, noting that the supply of capital goods is needed by the manufacturing industry since the local market is not yet able to plug the demand.
The newly-issued regulation, effective from Feb. 1 through Dec. 31, 2018, is an extension of a 2013 ministerial regulation on the import of used capital goods that was slated to extend until the end of this year.
Jongkie Sugiarto, a chairman at Gaikindo, warned that extending the regulation will further erode the market for local truck companies in Indonesia, which has already started seeing a decline in sales in the past three years amid the collapse of global commodity and oil prices, as well as a nationwide slowdown.
The availability of spare parts as well as after-sales services fitted for the imported secondhand trucks would also be unclear, putting the safety and satisfaction of consumers into question, according to Jongkie.
Truck sales in Indonesia stood at 74,789 units last year, a 36 percent decrease from 116,096 million units in 2014 and a 46 percent drop from 138,515 in 2013, according to data from Gaikindo.
"This new regulation could kill the local truck industry," he told reporters in Jakarta on Wednesday. "We're trying to talk it out with the Trade Ministry."
He proposed the government to limit the imports to trucks brands that are not yet available in Indonesia — such as those weighing over 40 tons — and allow only the brand holders to import the used goods.
In the recently revised regulation, end users can ship in up to 279 types of capital goods, including forklift trucks and other types of truck that are equipped with a lifter at an age of less than 20 years. Meanwhile, reconditioning companies can import up to 186 types of goods and remanufacturing companies are allowed to import up to 18 types.
"If the brand holders are the ones who import, they will be responsible for spare parts, but if it's open to the general users, they will likely just wash their hands after importing," he said.