Bakrie also required to export its cars
Bakrie also required to export its cars
JAKARTA (JP): The Investment Coordinating Board has licensed
PT Bakrie Motor, a subsidiary of the Bakrie Group, to produce
both passenger and commercial vehicles domestically.
In a letter dated Nov. 15, the board's chairman Sanyoto
Sastrowardoyo, who is also state minister of investment, required
Bakrie Motor to export 20 percent of its planned output of 25,000
vehicles per annum.
The value of its exports is projected to reach $65 million per
annum.
The Bakrie-car project is expected to cost Rp 290 billion
(US$122.6 million), with Rp 100 billion coming from equity and
the remaining Rp 190 from loans.
With such an investment, Bakrie Motor will also manufacture
26,250 car bodies and 5,000 chassis for their own use.
The remaining components, including engines, will be sourced
from both foreign and domestic auto part manufacturers.
Bakrie Motor will import completely built-up engines from
Peugeot-Citroen Moteur for its vehicles. In addition, it has
asked PT Bakrie Tosan, another unit of the Bakrie Group, to
manufacture brake systems.
Other components will be ordered from local independent
companies, including PT Dasa Windu Agung, PT Kayaba, PT Nippon
Denso Indonesia, PT Inou Rubber and PT Bridgestone Tire
Indonesia.
The chairman of the Bakrie Group, Aburizal Bakrie, has said
Bakrie vehicles will have no less than 40 percent local content
in the first year of production, which is expected at the end of
next year.
The local content will be raised to 50 percent in the second
year and to 60 percent in the third year under the weighting
system set by the government.
If the Bakrie vehicles are recognized as having 60 percent
local content, they will have the right to enjoy tax breaks from
the government.
Without such tax facilities, Bakrie vehicles will be sold for
between Rp 38 million (US$16,060) and Rp 60 million, depending on
the specifications requested by buyers.
Bakrie will produce cars of three engine types, namely 8-
valve, 1,900cc engine; 16-valve, 2,000cc engine; and 2,000cc
turbo intercooler engine.
The Investment Coordinating Board has given Bakrie Motors
opportunities to diversify its product lines into producing other
auto components. (rid)