Indonesia expects German cars to become more affordable once the European trade deal takes effect early next year, as tariffs on automobiles are expected to be close to 0%, according to a senior minister.

Southeast Asia's largest economy is working towards implementing its trade agreement with the European Union (EU). As the agreement undergoes finalisation and the required legislative processes, Jakarta is aiming for the pact, known as the Comprehensive Economic Partnership Agreement (CEPA), to take effect in January 2027.

Chief Economic Minister Airlangga Hartarto expressed hope that German cars would enter the Indonesian market at "competitive prices" once the agreement is implemented.

"With the CEPA, the tariffs on cars will be close to 0%," Airlangga told reporters at the German Unity Day reception in Jakarta, recently.

He also said he wanted to see the "famous German people's car be sold at an affordable price here", referring to German automaker Volkswagen.

"Our cars are very modern, high-tech, and long-lasting. Thanks to the CEPA, German companies have better access to the growing Indonesian market. That will make us both more prosperous," Beste said.

Indonesia reported that its trade with Germany fell by 7% year-on-year (yoy) to nearly US$3.9 billion in January-August 2026. The country's imports of German vehicles declined to US$ 65.8 million over the same period, down by almost 63% yoy, according to Trade Ministry data.

Under the CEPA, Indonesia and the EU will eliminate tariffs on more than 98% of tariff lines, and on nearly 100% of trade in terms of value.