Timor car not to be deterred by price war<\/p>\n
JAKARTA (JP): The Timor car, produced in South Korea but
\ndubbed the \"national\" car of Indonesia, is determined to compete
\nhead-to-head with other auto firms in the local market.<\/p>\n
Benny Koernadi, a director at PT Timor Industri Komponen -- a
\ncompany assigned to provide local components for the Timor car --
\nsaid yesterday that recent price cuts made by a number of local
\nauto firms will not hurt the Timor's prospects.<\/p>\n
\"The Timor car is still strong enough to compete as it is not
\nin the same class as the (Bimantara) Cakra, but in the class of
\n(Bimantara) Nenggala,\" said Benny, in reference to vehicles
\nproduced by PT Citramobil Nasional -- a subsidiary of the well-
\ndiversified Bimantara Group -- in cooperation with Hyundai Motor
\nCompany of South Korea.<\/p>\n
The Timor sedan -- with a 1,500 cc engine to be produced by PT
\nTimor Putra Nasional in cooperation with Kia Motors Corp. of
\nSouth Korea -- will sell for Rp 35.75 million (US$15,199) (on the
\nroad), while the 1,500 cc Cakra and the 1,600 cc Nenggala will
\nsell at Rp 45 million and Rp 59.5 million (on the road),
\nrespectively.<\/p>\n
In addition to the Cakra and Nenggala, the Timor is also being
\nchallenged by the Suzuki Esteem, whose prices have been lowered
\nby Rp 5 million to Rp 35.9 million (off the road) for the 1,300
\ncc version and Rp 39.9 million (also off the road) for the 1,500
\ncc version. The new 1,600 cc Suzuki Baleno will sell for Rp 43.5
\nmillion (off the road).<\/p>\n
On-the-road prices are usually about 10 percent higher than
\noff-the-road prices.<\/p>\n
A. Safiun, chairman of the Indonesian Automotive Parts and
\nComponents Association, noted that the price war, which was
\ninstigated by the Timor's arrival, has helped bring local auto
\nprices closer to \"fair\" price levels.<\/p>\n
Local auto firms have been enjoying relatively large margins,
\nhe said..<\/p>\n
\"Their claim that government taxes are responsible for the
\nexpensive automobile prices has turned out to be wrong. In fact,
\ntheir margins were just too high,\" Safiun said.<\/p>\n
He noted that Indonesia's national car policy has created a
\nhealthier and more competitive auto market by forcing Japanese-
\naffiliated firms to cut down their margins.<\/p>\n
Despite the import duty and luxury tax exemptions that it
\nenjoys, the Timor is still expensive by comparison. Kia's Sephia
\nsedan, which is the same as the Timor save for the name, sells
\nfor US$8,000 (on the road) in Korea.<\/p>\n
Benny's response: \"Don't look at our price that way because
\nthe price covers not only the car's production costs but also the
\ncost of research and development as we plan to establish our own
\nresearch and development center here.\"<\/p>\n
Benny added that his company is trying to keep down the price
\nof the Timor by speeding up the production and use of local
\ncomponents, which are cheaper than imported parts.<\/p>\n
Executives from 12 South Korea auto vendors were in Jakarta
\nyesterday to explore investment opportunities in the auto
\ncomponents industry that will support the production of Timor
\ncars here.<\/p>\n
The visit was the second made by Korean businesses after 16
\nvendors from the country came on an investment mission here last
\nJune.<\/p>\n
Safiun said the 16 vendors were committed to starting their
\ninvestments here in September, in cooperation with local
\npartners. He added that the 12 vendors in town yesterday will
\nrealize their investment plans as soon as they find local
\npartners.<\/p>\n
Benny noted that Timor Industri Komponen will willingly form
\npartnerships with foreign vendors that cannot find local vendors
\nfor partners.<\/p>\n
He said that the Timor will have a local content make-up of
\n38.8 percent by the end of its first year of being assembled in
\nIndonesia. Timors destined for the Indonesian market are
\ncurrently being assembled in South Korea, but will be produced at
\nlocal assembly plants by March 1997. (rid)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/timor-car-not-to-be-deterred-by-price-war-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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