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Carmakers Seek Relief to Indonesia Emission Rules Amid Pandemic

Carmakers Seek Relief to Indonesia Emission Rules Amid Pandemic

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Carmakers in Indonesia are seeking a delay to the implementation of new emission rules for diesel vehicles, saying they need relief to cope with the coronavirus pandemic that’s hurting sales.

In a letter to Siti Nurbaya Bakar, the minister for environment and forestry, the country’s automotive-industry association requested the new Euro IV emission standards be postponed by at least a year. As things stand, the rules are set to take effect in April 2021.

If new standards are introduced next year, carmakers could be left with substantial unsold stock, according to the carmaker group, which represents manufacturers including Toyota Motor Corp. and Honda Motor Co. The virus pandemic has kept consumers away from showrooms and hurt the economy. The majority of commercial vehicles sold in Indonesia run on diesel.

“In the midst of declining purchasing power on motor vehicle products, the implementation of Euro IV will lead to a rise in vehicle prices which will slow down the recovery,” the group said in a the letter seen by Bloomberg. The letter was verified by Jongkie Sugiarto, one of the association’s co-chairmen.

The industry group has slashed its domestic vehicle sales forecast for this year to 600,000 units from 1.1 million. Last month, China said it is relaxing some emissions standards to help vehicle makers in the world’s biggest market weather an unprecedented industry slump.

Chinese Auto Shares Rise as Regulator Relaxes Emission Rules

A spokesman for Indonesia’s environment and forestry ministry didn’t have an immediate comment.

The carmaker group said the virus outbreak has caused delays in testing needed to ensure compliance to the new rules, as well as problems in securing necessary components from abroad.

©2020 Bloomberg L.P.