GM reaffirms long-term commitment to RI<\/p>\n
JAKARTA (JP): PT General Motors Buana Indonesia says it will
\nmaintain its long-term commitment to Indonesia despite its
\ndecision to delay further local investment here because of recent
\nnational car policy.<\/p>\n
General Motors Buana's president, William S. Botwick, said in
\na statement yesterday that the company's long-term local
\noperations would not be affected by its decision to delay new
\ninvestment in Indonesia until the affects of Indonesia's national
\ncar policy could be assessed.<\/p>\n
\"There is a great deal of uncertainty in the Indonesian
\nautomotive industry at the moment. The national car policy has
\nresulted in discriminatory benefits for one car maker, which may
\nwell impact on General Motors' future strategy in Indonesia,\" his
\nstatement said.<\/p>\n
General Motors Buana is the sole agent and distributor in
\nIndonesia for the United States-based automobile manufacturer
\nGeneral Motors (GM).<\/p>\n
The company is controlled by President Soeharto's half-
\nbrother, Probosutedjo. It is one of several local car assemblers
\nthat have expressed interest in developing automobiles under the
\n\"national car program\".<\/p>\n
Botwick said that while GM was \"disappointed\" that Indonesia
\nno longer had a \"level playing field\", it had no intention of
\nwithdrawing its Indonesian operations.<\/p>\n
\"Until we get a better understanding of where the Indonesian
\ngovernment is heading with its national car policy, we cannot
\nfinalize our long-term investment strategy,\" he said.<\/p>\n
GM has spent US$110 million refitting its manufacturing plant
\nin Bekasi, West Java.<\/p>\n
In 1993, it bought 60 percent of Garmak Motors, the former
\ndistributor and manufacturer of Opel cars, and invested a large
\namount to develop a right-hand-drive Opel Blazer.<\/p>\n
The Blazer originates from the United States. Local components
\ncomprise up to 40 percent of the car, with components from some
\n55 Indonesian suppliers.<\/p>\n
In a separate development, Minister of Industry and Trade
\nTunky Ariwibowo acknowledged that he had received many questions
\non national car policy during his visit to the United States.<\/p>\n
He was quoted by Antara yesterday as saying that he had
\nexplained the policy's goal and background to American
\nbusinessmen, officials and congressmen in Washington.<\/p>\n
The government's national car program will give tax breaks --
\nincluding exemptions from import duties and luxury taxes -- to a
\nmanufacturer if its cars' local components reach 20 percent by
\nthe end of the program's first year, 40 percent by the end of the
\nsecond year and 60 percent by the end of the third year.<\/p>\n
Government has decided to award national car status to only
\none car, the \"Timor\" sedan which will be manufactured by PT Timor
\nPutra National in collaboration with South Korea's Kia Motors
\nCorp.<\/p>\n
Since this decision, the government has allowed Timor Putra,
\nwhich is controlled by President Soeharto's youngest son Hutomo
\n\"Tommy\" Mandala Putra, to import completely assembled cars in its
\nfirst year of operations.<\/p>\n
Japan, the European Commission and the United States have all
\ncriticized the national car program saying it violates the rules
\nof the World Trade Organization.<\/p>\n
GM's Asian and Pacific Operations chief, Donald Sullivan, said
\nearlier this month that the company has decided to suspend
\nadditional development in Indonesia because of the discriminatory
\nprivileges given by the national car program. (pwn)<\/p>",
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