Bimantara hopes for flexibility, pursues car plan<\/p>\n
JAKARTA (JP): President Soeharto's son Bambang Trihatmodjo is
\ndetermined to compete with his younger brother Hutomo Mandala
\nPutra in the production of national cars.<\/p>\n
Bambang, chairman of the well-diversified Bimantara Group,
\nsaid yesterday that his group will go ahead with its plan to
\nlaunch a national car, to be called Bimantara, despite the
\ngovernment's refusal to grant it the luxury tax and tariff breaks
\ngiven to his younger brother.<\/p>\n
\"We will continue to ask (for tax and tariff breaks), but I
\ndon't know if we will be granted the facilities or not,\" Bambang
\nsaid after a signing ceremony for the development of a toll road
\nproject.<\/p>\n
The government announced last February that it would grant tax
\nand tariff breaks to PT Timor Putra Nasional, controlled by
\nHutomo, to produce a sedan under the Timor brand name with Kia
\nMotors Corp. of South Korea.<\/p>\n
Bambang said Bimantara's subsidiary, PT Citra Mobil Nusantara,
\nis cooperating with another South Korean car manufacturer, Hyndai
\nMotor Company, to produce the Bimantara car later this year.<\/p>\n
He was quoted by the official news agency Antara as saying
\nlast Sunday that his company has earmarked Rp 800 billion (US$342
\nmillion) to develop the Bimantara. The company plans to produce
\n50,000 Bimantara sedans per annum.<\/p>\n
He said earlier that the sedans, with 1500 cc or 1600 cc
\nengines, are likely to cost less than Rp 35 million (US$14,970)
\nif his company gets the same exemptions as Timor Putra.<\/p>\n
When asked yesterday if his company could survive without
\ngovernment incentives, he smiled and answered, \"I hope so.\"<\/p>\n
Minister of Industry and Trade Tunky Ariwibowo said last month
\nthat the government would extend luxury tax and tariff breaks to
\nonly one car firm, Timor Putra, for three years.<\/p>\n
\"If limited to one firm only, it sounds somewhat inadequate
\nand monopolistic. What's more, Indonesia's population has reached
\nalmost 200 million,\" Bambang said.<\/p>\n
Bambang said earlier that ideally there should be more than
\none firm developing national cars in Indonesia, as is the case in
\nSouth Korea. With a population of only 60 million, South Korea
\nhas more than two national cars.<\/p>\n
Local firms<\/p>\n
Apart from Bimantara, a number of local car firms have
\nexpressed interest in developing national cars in order to get
\nthe duty and tax exemptions.<\/p>\n
They include General Motors Buana Indonesia, controlled by
\nSoeharto's half-brother Probosutedjo, and the Indomobil Group,
\nthe second largest local car assembler which is controlled by
\nbusiness tycoon Liem Sioe Liong, also known as Sudono Salim.<\/p>\n
Bambang noted that the government's new national car policy
\nhas caused some grumbling among local car assemblers and foreign
\ncar firms.<\/p>\n
However, he said, the impact of the new policy will be
\npositive. It will deepen the country's industrial structure,
\nespecially in the automotive sector, and reduce its dependency on
\nforeign automotive technologies.<\/p>\n
Bambang said development of the country's automotive industry
\nhas been very slow during the last 25 years. He added that the
\nindustry cannot even reach the program's targeted local content
\nrequirement, let alone develop a national car.<\/p>\n
Some industry analysts say that the government's national car
\npolicy could wash away the \"sins\" of the existing car assemblers,
\nwhich they say have enjoyed big profits.<\/p>\n
Bambang suggested that local car firms cooperate with each
\nother to develop another national car. (rid)<\/p>",
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