Timor vows to stick with its manufacturing project<\/p>\n
JAKARTA (JP): PT Timor Putra Nasional, a controversial car
\ncompany controlled by the youngest son of former president
\nSoeharto, will continue its plan to build an automotive industry
\ndespite the change in government.<\/p>\n
Timor spokesman Mochamad Ircham said Monday night the
\nresignation of Soeharto as president and ascent of former vice
\npresident B.J. Habibie would have no impact on the company's
\ntarget to finish its manufacturing plant in Cikampek, West Java,
\nby the end of this year.<\/p>\n
\"We are still sticking to the same plan of having a full
\nmanufacturing industry,\" Ircham told The Jakarta Post.<\/p>\n
\"The fact that Tommy (Soeharto's son Hutomo Mandala Putra) is
\nthe shareholder of PT Timor is just another reality,\" he said,
\nadding that Tommy was there only to guide the company until it
\nsucceeded in building a car industry.<\/p>\n
The Timor car project, which began in 1996, caused a
\ncontroversy both domestically and internationally when it was
\ngranted import duty and luxury tax exemptions to import cars from
\nKorea's Kia Motors Corp.<\/p>\n
The tax incentives made the so-called national car 60 percent
\ncheaper than other cars in the country.<\/p>\n
However, an economic reform deal agreed with the International
\nMonetary Fund (IMF) in January this year ended Timor's tax
\nexemptions along with other projects granted exclusive facilities
\nby the government.<\/p>\n
Ircham denied that Timor's image was tarnished by the
\ncorruption, nepotism and collusion known to taint Soeharto's
\nregime.<\/p>\n
Soeharto quit the presidency and was succeeded by Habibie last
\nweek after overwhelming calls by students and public figures for
\nhim to step down.<\/p>\n
\"Sentiment toward our brand do not exist. Though people link
\nit (with the current political situation), I will not join them,\"
\nhe said.<\/p>\n
During four days of social unrest in the city earlier this
\nmonth, angry mobs often targeted car dealerships of Timor and
\nBimantara, a business group owned by Soeharto's other son Bambang
\nTrihatmodjo.<\/p>\n
Some companies warned their employees to avoid driving or
\nriding in either Timor or Nenggala and Cakra, the Indonesian
\nversion of Korea's Hyundai cars.<\/p>\n
Ircham said Timor sales had dropped by about 50 percent this
\nyear. Since the company started selling the imported cars in
\nOctober 1996, more than 25,000 cars have been sold and a further
\n14,000 cars remain in stock.<\/p>\n
Separately, Hyundai announced last week it was planning to
\nquit its partnership with Bimantara and seeking investors to buy
\nits car assembly line in Indonesia.<\/p>\n
Hyundai Motor Company produces Hyundai Accent, which is called
\nBimantara Cakra here, and Elantra, which is called Bimantara
\nNenggala, and sells them through Bimantara's PT Citra Mobil
\nNasional.<\/p>\n
Hyundai and Bimantara delayed late last year a US$400 million
\nproject to build an automotive industry with the capacity to
\nmanufacture 200,000 vehicles a year, due to financial
\ndifficulties.<\/p>\n
Neither of the top executives of PT Bimantara Cakra Nusa, the
\ngroup's automotive division, were available for comment despite
\nrepeated calls by the Post Monday and yesterday.<\/p>\n
Car analyst Suhari Sargo said Bimantara might end up becoming
\nan authorized importer only.<\/p>\n
\"There is still hope that it can exist as a license holder to
\nimport cars but the chance of building an industry is over.\"<\/p>\n
Suhari said Timor's chance of expanding its market was now
\nremote in light of the current political situation.<\/p>\n
\"The situation is not benefiting them, their image has been
\ntainted.\"<\/p>\n
In addition, the social unrest which paralyzed the city last
\nweek has practically crippled car sales activities. The first
\nweek of this month was about the only active time for sales, he
\nsaid.<\/p>\n
Chairman of the Association of Indonesian Automotive
\nIndustries Herman Latief said less than 2,000 cars might have
\nbeen sold this month. (das)<\/p>",
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