National car project to start next March<\/p>\n
JAKARTA (JP): PT Udatin is gearing up construction of an
\nassembly plant for the national car, to be called Timor, despite
\ngrowing criticism against the controversial car project, a
\ncompany executive said here yesterday.<\/p>\n
Udatin's president, Fritz H. Eman, said that the assembly
\nplant's construction, which is now underway, is scheduled for
\ncompletion early next year.<\/p>\n
"We hope to begin the assembly job next March," he told
\nnewsmen, while acknowledging that the operation of the assembly
\nplant would be several months behind schedule.<\/p>\n
Udatin, a subsidiary of the Udatinda Group, is the assembly
\ndivision of PT Timor Putra Nasional, which in February received
\nan exclusive right to develop the national car.<\/p>\n
Timor Putra, controlled by President Soeharto's youngest son
\nHutomo Mandala Putra, initially planned to market its car at home
\nin September.<\/p>\n
Eman, who has a 35-percent stake in Timor Putra's
\nmanufacturing unit, PT Kia Timor Motor, said that he was not sure
\nwhether the Timor car could be launched in September, even though
\ntwo major automotive producers -- the Astra Group and Indomobil
\nGroup -- agreed to temporarily carry out the assembly jobs.<\/p>\n
"But I assure you that we will be able to meet the
\ngovernment's requirement to manufacture at least 60 percent of
\nthe car components at home by the end of the third year of
\noperations, even though there is a delay in the assembly plant's
\noperation," he said.<\/p>\n
The government granted a pioneer status in February to Timor
\nPutra to produce a national car with Kia Motors of South Korea,
\nan exclusive arrangement that will enable the company to receive
\na series of tax breaks, including exemptions of import duties and
\nluxury taxes.<\/p>\n
The tax incentives, which will last for three years, will
\nenable the company to sell its products at half the price of
\nJapanese makes of the same class (with a 1,600cc engine).<\/p>\n
Timor Putra will commence activities by importing all car
\ncomponents from Kia Motors.<\/p>\n
The car's assembly will be handled by Udatin, while the
\nmanufacturing of engines and other car components will be carried
\nout by Kia Timor Motor.<\/p>\n
Udatin is now constructing an assembly plant in Surabaya, East
\nJava, with an initial production capacity of 36,000 cars per
\nannum. The company will invest at least US$50 million in the
\nassembly project<\/p>\n
Kia Timor Motor is also constructing a manufacturing plant in
\nCikampek, West Java, with an investment of $260 million. Unlike
\nUdatin, Kia Timor Motor would focus its operations on the
\nproduction of engines and other car components.<\/p>\n
Kia Timor Motor is 35-percent-owned by Indauda, Udatin's
\nsister firm, 35 percent by Timor Putra and 30 percent by Kia
\nMotors.<\/p>\n
Illogical<\/p>\n
The exclusive rights and tax breaks given to Timor Putra in
\ndeveloping the national car has been widely criticized.<\/p>\n
Major automobile giants from Japan, the United States and
\nEurope demanded that the Indonesian government review the
\nnational car project, saying that the exclusive treatment given
\nto Timor Putra is against the free trade principles set by the
\nWorld Trade Organization.<\/p>\n
In yesterday's meeting, Eman, who is known as an important
\nperson behind the introduction of the national car project,
\nbranded foreign car manufacturers' criticisms as being illogical.<\/p>\n
"It is completely unfair and illogical," he said, referring to
\nthe foreign car makers' criticisms.<\/p>\n
Eman said it was quite unfair for the foreign companies to
\noppose the national project, given their lack of commitment in
\ndeveloping the country's automotive industry.<\/p>\n
"They have been here for over 20 years, but they have never
\nused their opportunities to develop a full manufacturing program
\nas proposed by Timor Putra," he said. "So it is quite illogical
\nif they are now very critical."<\/p>\n
Minister of Industry and Trade Tunky Ariwibowo said recently
\nthe national car policy's launch was a breakthrough for the
\nfuture of the country's automotive industry.<\/p>\n
He noted that the development of the country's car industry,
\nwhich started over 20 years ago, has shown no significant
\nprogress.<\/p>\n
The minister did not directly blame the industry's slow
\nprogress on Japanese car manufacturers, which now control more
\nthan 80 percent of the Indonesian automobile market. But analysts
\nsaid that the slow growth was partly caused by Japanese
\ncar makers' reluctance to share their technology with their local
\npartners.<\/p>\n
Eman said foreign car makers were not only reluctant to
\ntransfer their technology to their local partners, but also to
\nexpand their investments.<\/p>\n
"Their investments are, in fact, too small as compared to
\ntheir long presence in the country," he said.<\/p>\n
Eman said that the main concern of the foreign car makers is
\nnot the establishment of a reliable domestic car industry, but
\nreaping maximum benefits from the country's huge market.<\/p>\n
"That's why it is very important for Indonesia to make a
\nbreakthrough in its car industry before the WTO's free trade
\nprinciples are fully applied in 2003," he said.<\/p>\n
Kia Motors announced last week that it would begin exporting
\nits cars to Timor Putra next month, with an initial shipment of
\n4,000 units. The Korean cars will be exported in the form of
\ncomponents. (hen)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/national-car-project-to-start-next-march-1447893297",
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