Car makers should take aircraft cue<\/p>\n
JAKARTA (JP): State Minister for Research and Technology B. J.
\nHabibie said yesterday that the development of the automotive
\nindustry should follow the path of the aircraft industry.<\/p>\n
\"Indonesia will be able to build its own automotive industry
\nif its development follows the example of the aircraft industry,\"
\nHabibie told journalists before attending a limited cabinet
\nmeeting on economy.<\/p>\n
Habibie, also president of the state-owned aircraft
\nmanufacturing company, explained that the development of the
\naircraft industry in Indonesia focuses on the designing of a
\nproduct while the components can be made elsewhere.<\/p>\n
He said that if the automotive industry also focuses on
\ndesigning only, while the engines and components are obtained
\nfrom various suppliers, automotive producers will be able to free
\nthemselves from their principal companies.<\/p>\n
\"However, if it (focusing on designing) is started now it
\nmight be difficult,\" Habibie said, adding that the dependency
\nlevel of local automobile assemblers on their overseas principals
\nis still strong.<\/p>\n
When asked on the protection given to the automotive industry,
\nHabibie said such protection is needed at the initial stage but
\nif not reduced, it will hamper its development in the long run.<\/p>\n
The government has given protection to the automotive industry
\nsince the middle 1970s. Analysts claim that the protection has
\nbeen misused by car assemblers, which have used the huge profits
\ngained from selling their products, at far above their real
\nprices, to expand their businesses into other sectors.<\/p>\n
Director General of Metal, Machinery and Electronic Industries
\nEffendi Sudarsono said last month that starting this year, the
\ngovernment will gradually lower the levels of import tariffs on
\nautomotive products.<\/p>\n
The government presently imposes a 175 percent import duty on
\nsedans and station wagons not assembled in Indonesia. On top of
\nthe duty, imported assembled vehicles are also subject to a 100
\npercent surcharge.<\/p>\n
Slow<\/p>\n
Habibie also said that the development of the automotive
\nindustry has been slow because there are too many brands
\ndeveloped in the country. In the 1970s, he said, Indonesia had
\nmore than 60 brands.<\/p>\n
\"Consequently, no single company could grow very quickly,\"
\nHabibie said, adding that, as a comparison, the United States and
\nGermany develop only four brands, while South Korea develops only
\nthree brands.<\/p>\n
Concurring Habibie's argument, Minister of Industry Tunky
\nAriwibowo told journalists at his office yesterday that 26 brands
\nare now operating inefficiently.<\/p>\n
However, he said that his ministry will not issue a regulation
\nto reduce the number of brands. \"If I issue a regulation to limit
\nthe brands, it contradicts our general policy as we are in the
\nera of deregulation, not regulation,\" he said. (rid)<\/p>",
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