AFTA won't bring cheap cars

AFTA won't bring cheap cars

The Jakarta Post, Jakarta

The Association of Indonesian Vehicle Importers (AIKI) said
that the number of cars imported from ASEAN member countries
would remain low this year, despite the implementation of the
regional free trade area, which has slashed import tariffs to
between zero percent and five percent.

AIKI chairman Budiman Siroj said on Wednesday this was because
Malaysian-made cars could not enjoy low import tariffs when
entering the Indonesian market because Malaysia had delayed the
opening up of its automotive sector until 2005.

Budiman said that there were only three Southeast Asian
countries -- Indonesia, Thailand and Malaysia -- which
manufacture cars.

Under the ASEAN Free Trade Area scheme or AFTA, which took
effect on Jan. 1, the import tariff on almost all products traded
among the six original ASEAN members - Indonesia, Singapore,
Malaysia, the Philippines, Brunei Darussalam, and Thailand --
should be reduced to between zero percent and five percent.

Indonesia and Thailand have agreed to include their automotive
products in the AFTA scheme.

It means that car imports from Thailand could be sold at
cheaper prices on the Indonesian market starting this year.

Some reports suggested earlier that the implementation of AFTA
would trigger the influx of cheaper cars onto the local market,
which in turn would cause car prices at home to go down.

Elsewhere, Budiman predicted that the domestic market demand
for imported cars, particularly on already assembled models,
would remain high this year, at around 10,000 units.

He said that this would be dominated by Japanese and European-
made cars.

As of November last year, the total number of cars imported
reached 8,500 units.

"Car imports will remain high this year because there will be
several new models equipped with high technology," Budiman was
quoted as saying by Antara.