Astra to launch cheap sedans by '98: T.P. Rachmat

Astra to launch cheap sedans by '98: T.P. Rachmat

KARAWANG, West Java (JP): A joint venture between PT Astra
International and a Japanese company plans to launch low-priced,
1500-cc sedans by 1998.

Astra's president, Theodore Permadi Rachmat, told reporters
here yesterday that the joint venture will invest US$500 million
to produce the car, including $350 million to set up its assembly
plant.

Astra will have 51 percent of the shares in the joint venture
and the Japanese partner, whose name was not disclosed, will
control the remaining shares.

The assembly plant will be built on a 500-hectare area at the
Kerawang International Industrial City in West Java.

The joint venture also plans to launch cars of a similar type
in Thailand next year under the name AFC. The car in Indonesia
has yet to be named.

"The cars will look like Honda Civic sedans," explained
Aderizal Nazar, president of PT Toyota Astra Motor.

Despite having 40 percent local content at the time of
launching, Aderizal said the car will not qualify for the status
of national car because it will be produced by a joint venture.

A presidential instruction of Feb. 19, 1996, stipulates that a
"national car" must use an Indonesian brand name, be produced by
a company wholly owned by Indonesian shareholders and gradually
develop domestic technology, engineering and designing
capabilities.

The ruling also stipulates that a national car must reach 20
percent local content by the end of the first year of production,
40 percent at the end of the second year and 60 percent at the
end of the third year to qualify for three years of tax and
tariff breaks.

The government has said that only the Timor car -- produced by
PT Timor Putra Nasional, whose owner is President Soeharto's son
Hutomo (Tommmy) Mandala Putra -- qualifies for the status of
national car. Despite similar plans to launch automobiles with
high local content, the models of the Bimantara and Bakrie groups
have not qualified under the national car policy.

Astra's chief commissioner, Abdul Rachman Ramly, said
yesterday that the commercial vehicles produced by his company,
including the Espass and Isuzu Panther, already contain 40
percent to 50 percent in locally-made components.

The company plans to increase the local content to 60 percent
in two years.

Meanwhile, Director General of Metal, Machinery and Chemical
Industries Effendi Sudarsono yesterday inaugurated the tool and
die factory of PT FUJI Technica Indonesia, a joint venture
between Astra International (with a 55 percent stake) and three
Japanese companies -- FUJI Technica Inc. (25 percent), Nichimen
Corp (10 percent) and Itochu Corp. (10 percent).

The factory was built with a total investment of $30 million,
including $6 million in shareholder equity and the rest in bank
loans.

The factory, located in the Kerawang International Industrial
City, produces automotive component-making tools like dies,
master models, checking fixtures and jigs, as well as stamping
parts.

The joint venture will sell its products on the domestic
market for 50 percent to 60 percent less than import prices.

Effendi said that in 1995 Indonesia imported $130 million
worth of dies.

In the initial stage, the factory will produce 750 tons of
dies and 1,000 tons of stamping parts per year, which will be
increased to 1,500 tons of dies and 6,400 tons of stamping parts
per year in a later stage. The production of jigs, checking
fixtures and master models will start in the later stage. (jsk)