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Citroen to produce electric cars in Indonesia
Citroen is eyeing EV incentives that the government has set up for foreign car manufacturers.
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Nikolay Gryazin of Bulgaria and his codriver Konstantin Aleksandrov steer their Citroen C3 on Feb. 15, 2024, during the Umea Sprint 1, the first stage of the Rally Sweden and second round of the FIA World Rally Championship, in Umea, Sweden. (AFP/Jonathan NACKSTRAND)
F
rench automaker Citroen will begin to produce electric cars in Indonesia by partnering with an assembling company which owns an assembling plant in Purwakarta, West Java.
“We will start to produce [completely knocked down or CKD] units at a facility owned by Indomobil in Purwakarta, with an electric type EC3,” said Citroen Indonesia president director Tan Kin Pauw during a car launching event on Tuesday.
It is hoped that production will begin in June with 20 to 40 percent local components. By producing the electric vehicle (EV) locally, Citroen can be eligible for EV incentives that the government has set up for foreign car manufacturers.
The company started to market the EC3 in Indonesia in August last year by importing completely built up (CBU) units from India. The locally assembled electric units will substitute the EC3 imports from India. Aside from the EC3, the company also imports the C3 and C3 Aircross for Indonesian distribution.
The government has issued a regulation to add new incentives for automakers to build EV manufacturing plants in the country. In the new regulation, car manufacturers that agree to build their manufacturing facilities in Indonesia will be allowed to import CBU or CKD EVs without having to pay import duties or luxury goods value-added tax (VAT) until the end of 2025.
The government has also relaxed local content requirements. The EV carmakers are being given until 2026 to fulfill the minimum 40 percent domestically sourced component requirement.
The new policies have gained the interest of China’s BYD and Chery as well as Vietnam’s Vinfast.
