The Low Cost Green Car (LCGC; ) is an Indonesian automobile regulation which exempts low-cost and energy-efficient cars from luxury sales tax to ensure affordability, provided that they are assembled locally with a minimum amount of local components. The introduction of Low Cost Green Cars (LCGC) in Indonesia aimed to make car ownership more accessible for motorcycle owners and public transportation users. This initiative was designed to reduce fuel subsidies and enhance competition with imported cars from Thailand, ultimately fostering local job creation. In some aspects, the regulation is similar to the Japanese kei car category and the Thai Eco Car program which also reduce taxes for small and efficient cars.

Specifications The Ministry of Industry regulates LCGC to conform with the following initial specifications: Petrol engine, displacement capacity of 980–1,200 cc (0.98-1.2 L) with fuel consumption not lower than ; Research Octane Number (RON) 92 fuel for petrol engines; Diesel engine, displacement capacity up to 1,500 cc (1.5 L) with fuel consumption not lower than ; Cetane number (CN) 51 fuel for diesel engines; Turning radius below 4.6 m (4,600 mm); Selling price below Rp 95,000,000 (2013) according to the location of the headquarters of the sole agent, with adjustment for automatic transmission being 15%, for safety features 10%, and could be adjusted to inflation; Addition of an Indonesian brand name and logo; Manufacturing facility investment plan.

Regulation In May 2013, the Indonesian government released the Government Regulation (Peraturan Pemerintah) Number 41 Year 2013 about the Luxury Tax of Vehicles concerning LCGC and Low Emission Carbon (LEC) regulations. The main points of the regulation are: 0 percent luxury tax for cars with ICE with a maximum displacement of 1,200 cc for petrol and 1,500 cc for diesel and a minimal fuel consumption of . 50 percent luxury tax for green vehicles (hybrid, LPG, electric and others) with a minimal fuel consumption of . 75 percent luxury tax for green vehicles (hybrid, LPG, electric and others) with a fuel consumption between .

Investment Toyota, Daihatsu, Suzuki and Honda are set to produce a combined 500,000 LCGCs per year with a predicted total investment of $1.8 billion in Indonesia by the end of 2012, after the government has agreed to exempt the LCGC from the luxury tax to boost domestic sales.

On April 22, 2013, PT Astra Daihatsu Motor officially opened the Karawang Assembly Plant to anticipate LCGC, although the government's LCGC rule had not yet been released. The plant would assemble 4,000 units of the Toyota Avanza and/or Daihatsu Xenia per month in the first run and would produce 10,000 units of cars per month, including the LCGC Toyota Agya and Daihatsu Ayla when the rule had been released.

Models and sales Manufacturer Model Engine Displacement Sales 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Hatchback (5 seats) Astra Daihatsu Motor Daihatsu Ayla 1.0 L, 1.2 L 19,141 40,775 35,084 39,087 28,051 26,952 22,108 13,091 21,384 23,500 23,758 Nissan Motor Indonesia Datsun Go Panca(2014–2020) 1.2 L – 2,733 9,462 8,833 4,303 4,782 3,013 215 – – – Honda Prospect Motor Honda Brio Satya 1.2 L 4,958 26,683 31,820 36,470 43,378 46,900 54,659 29,979 29,976 46,804 52,792 Suzuki Indomobil Motor Suzuki Karimun Wagon R(2013–2021) 1.0 L 4,705 7,068 11,526 9,905 5,408 4,564 4,148 1,591 2,510 – – Toyota Astra Motor Toyota Agya 1.2 L 22,376 67,074 57,646 45,009 29,004 29,106 25,082 12,952 16,992 21,336 20,602 MPV (7 or 5+2 seats) Astra Daihatsu Motor Daihatsu Sigra 1.0 L, 1.2 L – – – 31,939 44,993 50,907 52,283 23,295 40,283 51,427 61,752 Nissan Motor Indonesia Datsun Go+ Panca(2014–2020) 1.2 L – 17,787 19,896 16,650 6,181 3,263 1,612 85 – – – Toyota Astra Motor Toyota Calya 1.2 L – – – 47,280 73,236 63,970 54,549 23,442 35,375 43,582 45,801 Total 51,180 162,120 165,434 235,173 234,554 230,444 217,203 117,741 146,520 186,649 204,705

In the first three months of 2014, 43,969 LCGC cars were sold.

In the first six months of 2014, 85,643 LCGC cars were sold.

In first seven months of 2014, the LCGC Toyota Agya sold 41,520 units to become the third highest selling car in Indonesia after the Toyota Avanza and Honda Mobilio.

Production and export

In 2013, Indonesia produced 52,956 LCGC/LEC with no export, and predicted that the 2014 LCGC/LEC production would be 150,000 units. Initial exports of the Daihatsu Ayla (as the Toyota Wigo) had been done in February 2014 to the Philippines. In 2013, Indonesia had exported non LCGC/LEC 170,907 Completely Built-Up (CBU) cars, and 105,380 Completely Knocked Down (CKD) cars.

See also

Rural car Kei car

References