PPnBM Extended, Dharma Group Optimistic The Performance of the Company and Automotive Industry will Improve

INDUSTRY.co.id - PT Dharma Polimetal ("Dharma Group"), a Triputra Group automotive component manufacturing company, is optimistic that the extension of PPnBM and the trend of sales of 4 wheelers (4W) which started positively since the beginning of the year will be positive for the company's performance and the automotive component manufacturing industry.

Dharma Group President Director Irianto Santoso said the extension of the Sales Tax on Government-Borne Luxury Goods (PPnBM DTP) incentive of up to 100% will create a multiplier effect on economic growth and increase the impetus for government policies to encourage public consumption, similar to the government's target.

"With the time addition of PPnBM until the end of the year, Dharma Group is optimistic that the consolidated revenue target (without joint venture companies) of Rp 2.8 trillion will be realized more easily than before the extension of PPnBM," said Irianto.

Irianto added the optimism of Dharma Group's management was reflected in the impact of PPnBM incentives which took effect in March this year. Last month, the government decided to extend the 100% PPnBM DTP incentive for motorized vehicles from the initial plan from March to August, and now extended until the end of this year.

4W sales data in September 2021 was recorded at 84,110 units, still stretching and reflecting an improvement in people's purchasing power.

4W sales figures had dropped to the lowest point of 3,600 units in May 2020 but started to grow to 49,200 units in February 2021. The spike occurred in March 2021 when the PPnBM incentive to 4W sales became effective and the sales number reached 84,910 units, much higher than during the early months of the pandemic.

As a result, in May 2021, the Ministry of Industry noted that sales of automotive components had fallen last year to only 20 percent from the period before the pandemic.

The number began to increase at the beginning of the year until March 2021, which was 40%-50% from the period before the pandemic. A sharp increase happened to 70%-80% from the pre-pandemic period after the PPnBM DTP incentive was implemented in March 2021.

The automotive component industry is a very broad business, ranging from new vehicles to replacement parts for each type of vehicle. These types of vehicles are divided into two-wheelers vehicles (2W), three-wheeler vehicles (3W), 4W, and buses & trucks.

Dharma Group, one of the players in the automotive component manufacturing industry, produces components in all of those vehicle segments. Thus, the impact of the improvement in automotive sales since the beginning of the year, the main trigger being the PPnBM DTP incentives, is also from the company's financial performance since the beginning of this year.

The Company recorded consolidated revenues (excluding joint ventures) of IDR 1.3 trillion from the beginning of the year to June. This achievement increased by 46.36% from the achievement in the first semester of 2020 of IDR 893 billion.

In addition to the PPnBM implementation factor, Irianto explained that the company's performance increase could not be separated from other factors such as the extension of 0% down payment policy for car ownership and improving economic activity for the September period.

Economic activity improvement in September is reflected from bank credit growth data which began to expand by 2.21% YoY and manufacturing PMI which expanded to 52.2.

"The other factor is the PPKM relaxation in almost in all Indonesia regions since August due to the improving conditions of the Covid-19 pandemic, making it possible to accelerate the pace of economic and business activity until the end of the year, which will be positive for the national automotive industry," said Irianto.