Analysts criticize new automotive industry policy<\/p>\n
JAKARTA (JP): Reaction to the new national automobile program
\nhas been mixed. Economists and securities analysts feel it is
\nunfair while the Chairman of the Indonesian Chamber of Commerce
\nand Industry Aburizal Bakrie welcomed the measure, believing it
\nwill result in lower car prices.<\/p>\n
\"I welcome and support any policy which will cut the prices of
\ndomestic products, including automobiles,\" Aburizal commented
\nyesterday.<\/p>\n
The program, unveiled on Wednesday, grants import duty and
\nluxury sales tax exemptions to cars which use Indonesian
\nbrand names, are produced by Indonesian companies and are
\ndeveloped with domestic technology, engineering and designs.<\/p>\n
Aburizal underlined, though, that all car companies which meet
\nthe requirements should be able to get the incentives granted
\nunder the national automobile program.<\/p>\n
But economist Didik J. Rachbini said the government's ruling
\nto exempt pioneer Indonesian automobile firms from import duty on
\ncomponents and the luxury tax on car sales was unfair and
\ninconsiderate because it only benefited PT Timor.<\/p>\n
Didik, who is the director of the Institute for the
\nDevelopment of Economics and Finance, said the policy could curb
\noverall economic growth as other automobile firms would struggle
\nto cut the prices of their products to compete with Timor's
\nproducts.<\/p>\n
He also felt the policy would affect the government's
\npopularity and was unlikely to change the face of the country's
\nautomobile industry \"As the industry has been in trouble for the
\npast 20 years, I doubt this new regulation can make it better,\"
\nhe said.<\/p>\n
The issue was not one of technology or business, but rather of
\npolitics and the economy, according to Didik.<\/p>\n
Protectionist<\/p>\n
He said this was not the first time the government had taken a
\nstance by issuing protectionist measures for certain
\nmanufacturers, and the issue of the new ruling for the automobile
\nindustry was just a case that could be extended to other
\nindustries.<\/p>\n
Didik said the government should make fair rules, especially
\nwhen dealing with matters of public interest.<\/p>\n
\"The government has failed to show that it can act as a good
\nreferee. Sometimes it becomes a businessman and at other times
\nbusinessmen become the government\" he said.<\/p>\n
Several securities analysts commented that the new car policy
\nmight affect the interests of new foreign investors in the
\ncountry.<\/p>\n
They said it would have an adverse impact on the automobile
\nindustry and other manufacturing industries as well.<\/p>\n
But members of the House of Representatives had different
\nviews on the issue.<\/p>\n
Legislator Hamzah Haz from the United Development Party
\nfaction welcomed the new ruling, but cautioned that it should not
\nlead to a monopoly for Timor cars, nor cause other automobile
\nfirms to collapse.<\/p>\n
He said the ruling should not only benefit the upper and
\nmiddle income classes but should help to provide the lower-income
\nclass with an affordable means of transportation.<\/p>\n
Similarly, legislator Sabam Sirait from the Indonesian
\nDemocratic Party faction, said the ruling should not be limited
\nto sedans but extended to commercial vehicles which are used most
\nby the general public.<\/p>\n
In a related development, an executive director of PT Timor
\nPutra Nasional Sudjaswin said yesterday that the Timor sedans are
\nbeing assembled at the PT Indauda plant in Surabaya which is 30
\npercent owned by the Kia Motor company of South Korea and 70
\npercent by President Soeharto's son Hutomo Mandala Putra.<\/p>\n
\"We will launch our Timor sedans from the Surabaya plant in
\nSeptember,\" Sudjaswin added.<\/p>\n
The assembly plant currently being built by PT Timor Putra in
\nCikampek, West Java, will eventually take over the production of
\nthe cars.<\/p>\n
\"We are confident about achieving 20 percent local content by
\nthe end of the first year of our production,\" he said but he
\ndeclined to say when the production in Cikampek would start.
\n(pwn\/kod\/31\/pan)<\/p>\n
Editorial -- Page 4<\/p>\n
Comment -- Page 9<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/analysts-criticize-new-automotive-industry-policy-1447893297", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }