'National' cars hit the market<\/p>\n
JAKARTA (JP): The Timor Sedan, free from luxury taxes and
\nimport duties and made in South Korea but dubbed Indonesia's
\n\"national car\", made its market debut here yesterday, challenging
\nthe Japanese domination of the country's growing car market.<\/p>\n
PT Timor Putra Nasional, which plans to produce Timor cars in
\ncooperation with Kia Motors Corp. of South Korea, launched the
\nfour-door, 1,500-cc sedan ahead of its original schedule of
\nSeptember.<\/p>\n
The Timor Putra's president, Hutomo (Tommy) Mandala Putra, told
\na news conference that Timor sedans would cost Rp 35.75 million
\n($15,238), including on-road costs, which is about half the price
\nof comparable Japanese-made cars.<\/p>\n
\"We target to sell 70,000 Timor cars in 1997. With that
\nvolume, we will reach the economies of scale needed to produce
\nthe cars in Indonesia,\" said Hutomo, who is the youngest son of
\nPresident Soeharto.<\/p>\n
The government has let Timor Putra produce and assemble its
\ncars in Kia's plant in South Korea until its local manufacturing
\nplant is ready. Timor Putra is the only car manufacturer granted
\nluxury tax and import tariff exemptions.<\/p>\n
Starting next March, he said, the assembly of Timor cars will
\nbe transferred from South Korea to local assembly plants,
\nincluding those owned by PT Indomobil and PT Indauda.<\/p>\n
\"By that time, we expect that Timor cars will contain 20
\npercent local components,\" he said.<\/p>\n
To gain tax and tariff breaks, the company must meet the
\ngovernment's local content requirement; namely, 20 percent local
\ncontent by the end of its first year of production, 40 percent by
\nthe end of its second year and 60 percent by the end of its third
\nyear.<\/p>\n
Hutomo said Timor Putra had established three subsidiaries to
\nsupport the development of Timor cars: PT Kia Timor Motor, PT
\nTimor Industri Komponen and PT Timor Distributor Nasional.<\/p>\n
Kia Timor Motor, a joint venture with Kia Motors, will
\nestablish assembly and manufacturing plants in Cikampek, West
\nJava, later this year. Timor Industri Komponen will produce
\ncomponents or buy components from existing manufacturers. Timor
\nDistributor will market the Timor cars.<\/p>\n
Design<\/p>\n
Hutomo said that Timor Putra plans to establish another firm
\nwhich will engineer and design new products.<\/p>\n
\"It will be the brain of our auto group,\" Hutomo said, adding
\nthat his company plans to invest more than US$100 million setting
\nup a research and development center.<\/p>\n
Meanwhile, the president of Timor Distributor, Suparto
\nSoejatmo, said that people's interest in Timor cars was good. The
\ncompany had received orders for 33,000 cars.<\/p>\n
\"We thank the people for their restraint (for not buying other
\ncars) and patience in waiting for Timor cars,\" Suparto said,
\nadding that Timor cars would be on display at 22 malls in Greater
\nJakarta until Nov. 14.<\/p>\n
When the government announced its national car policy last
\nFebruary, many local car makers complained of decreased sales
\nbecause people were waiting to find out about the Timor car.<\/p>\n
Governments and car manufacturers from Japan, Europe and the
\nUnited States have opposed Indonesia's national car policy on the
\ngrounds that it breaches the provisions of the World Trade
\nOrganization (WTO). They have threatened to bring Indonesia to
\nthe WTO if it does not change its national car policy.<\/p>\n
Hutomo, however, dismissed suggestions that the Japanese, who
\ncontrol around 90 percent of the Indonesian vehicle market, could
\ntake Indonesia to the WTO.<\/p>\n
\"We are looking for the best solution for the Japanese as they
\nknow the national car program cannot be stopped and they need to
\nlook for a compromise with the Indonesian government,\" he said.<\/p>\n
The Americans, he added, now understood the program after a
\nrecent visit to Washington by Minister of Industry and Trade
\nTunky Ariwibowo, who attended yesterday's launch.<\/p>\n
Tunky, speaking to reporters, defended the policy saying that
\ndespite industry deregulation in 1993, car makers had failed to
\nincrease local content.<\/p>\n
He said under the new regulations issued last month, car
\nmakers other than Timor Putra could get luxury tax breaks if they
\nmet local content targets.<\/p>\n
\"As soon as local contents reach 60 percent, car makers will
\nhave the same facilities as those of Timor Putra,\" he said.<\/p>\n
Tunky reiterated that Timor Putra would be the only producer
\nto get special tax and tariff privileges for the national car
\nproject.<\/p>\n
He dismissed speculation that the government would extend the
\nsame breaks to the Bimantara Group, controlled by Hutomo's elder
\nbrother Bambang Trihatmodjo. Bimantara, through its auto
\nsubsidiary PT Citramobil Nasional, plans to launch a 1,500 cc
\nsedan on July 23. It will be called Bimantara Cakra. (rid)<\/p>",
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