The Indonesian government will put in place a regulation on the production of low-cost green cars (LCGC) after an automotive manufacturer here invested heavily on green cars, a local news agemcy reported, quoting a senior government official as saying.

"The ministry of finance will ensure that the LCGC regulation is put in place," said Anshari Bukhari, Secretary General of the Ministry of Industry, adding that the ministry is keen on implementing the regulation by the end of this year.

Anshari said Indonesian Finance Minister, Agus Martowardojo, has prepared the regulation on LCGC because the government is concerned about the tax incentives for the production of low-cost cars. "It also reflects investors trust in the government," he said.

He said the Toyota Group has increased its production capacity to produce cars in accordance with LCGC cars production requirements.

The requirements include a machine capacity which should be below 1,200 cubic cylinders (cc), with a fuel consumption of 20-22 km per litre (minimum).

Astra, an Indonesia-based automotive manufacturer, had launched two low-cost and eco-friendly cars in September - Agya and Astra Daihatsu Ayla.

Anshari noted that the LCGC policy will boost Indonesia's national car production. Until the third quarter of this year, the automotive industry had grown by 7.52 per cent.

"The automotive, steel and food industries have contributed to the national industrial growth significantly," he added.