Kia's crisis may affect Timor car program, says Saleh Afiff<\/p>\n
JAKARTA (JP): The on-going financial crisis within South
\nKorea's Kia Motors Corp, may affect Indonesia's national car
\nprogram, says Coordinating Minister for Economic and Finance
\nSaleh Afiff.<\/p>\n
But auto analyst Suhari Sargo said he was confident Kia would
\nmaintain its highly profitable cooperation with program carrier
\nPT Timor Putra Nasional.<\/p>\n
Afiff was quoted by Kompas daily as saying in Tokyo early this
\nweek that Timor Putra could find it difficult to implement the
\nnational car program because of Kia's troubles.<\/p>\n
Afiff, who was in Tokyo for the World Bank-sponsored aid
\nmeeting on Indonesia, said he had checked the extent of Kia's
\ntroubles with the South Korean government, the firm itself and
\nKorean banks.<\/p>\n
But Suhari said he saw no threat to the national car program
\nbecause Kia would maintain its cooperation with Timor.<\/p>\n
Moreover, because it was a large corporation, Kia was likely
\nto be bailed out by the government and domestic banks, he said.<\/p>\n
The only possible problem could be a change of policy if Kia's
\nownership ever changed, he said.<\/p>\n
But Suhari said Kia would definitely keep to its cooperation
\nwith Timor Putra.<\/p>\n
"The bottom line in a business is making profit, and Timor's
\nKia-built car sales have so far been very profitable to them,"
\nSuhari said.<\/p>\n
South Korea's eighth largest conglomerate and third largest
\nauto maker said earlier its problems would not affect its
\noperations overseas, including two auto projects in Brazil and
\nIndonesia.<\/p>\n
"Kia Motors is still lucrative and has no problems. Its
\nproject in Indonesia is a promising business to be implemented
\nsuccessfully," South Korean Trade and Industry Minister Lim
\nChang-Yuel was quoted by AFP as saying.<\/p>\n
Kia cooperates with PT Timor Putra Nasional, owned by
\nPresident Soeharto's youngest son Hutomo Mandala Putra, to build
\nan Indonesian national car called Timor.<\/p>\n
The government gives tax and tariff exemptions to import Kia-
\nbuilt cars from South Korea, while Timor builds its car
\nmanufacturing plant in Indonesia.<\/p>\n
Tax-exempt Timors are sold at a price that is almost half that
\nof its competitors.<\/p>\n
Afiff was quoted as saying the crisis "might affect" the
\ngovernment-requested loan package of US$690 million for PT Timor
\nPutra National.<\/p>\n
President Soeharto recently asked a consortium of state and
\nprivate banks to give Timor loans to help build its plant.<\/p>\n
Kia Group, which controls Kia Motors, has recently been placed
\nunder the protection of creditors under a bank anti-bankruptcy
\npact after defaulting on mounting debt.<\/p>\n
The conglomerate was 9.5 trillion won (US$10.7 billion) in
\ndebt, including bank loans and notes at the end of last year,
\naccording to AP.<\/p>\n
The South Korean government had extend 30 billion won in
\nemergency loans to the group to overcome cash-flow problems.<\/p>\n
The group, in a self-rescue attempt, disposed of 14 of its 38
\nsubsidiaries through mergers and sell-offs. (das\/rid)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/kias-crisis-may-affect-timor-car-program-says-saleh-afiff-1447893297",
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