Indonesian Demand for Imported CBU Cars still Strong
Despite the country's high import tariffs and the high luxury goods tax, there remains strong demand for imports of completely built up (CBU) cars in Indonesia. As the Indonesian government is eager to limit imports of consumer goods, it set an average import tariff of 45 percent on CBU cars. Besides this import tariff the imported CBU car is also subject to Indonesia's luxury goods tax at 20 percent. However, these high taxes have done little to curtail imports of CBU cars. The real reason why some foreign-branded imported CBU cars see declining sales in Indonesia is due to weaker purchasing power.