Bakrie Group targets SE Asian, European marts

By Rikza Abdullah

PRESTON, Britain (JP): Aburizal Bakrie says his vans, which he hopes to launch late next year, will be targeted not only at the Indonesian market, but also Southeast Asian and European markets.

The chairman of the diversified Bakrie Group told reporters here that with testing approval from the Leyland Technical Center, his vans should be able to penetrate overseas export markets.

"When accompanied by testing approval from Britain, we hope it will be easier for the vans to get roadworthiness certificates from European countries." he said.

Aburizal was in England last week to test drive the first of several prototypes for his vans that are being developed by the British Leyland unit.

The 2,000 cc engine for the Bakrie vans use chiefly European technology but will be produced and assembled by PT Bakrie Motor, a unit of Bakrie Investindo, in Indonesia starting next June.

Aburizal said the vans will have no less than 40 percent local content in the first year of production, rising to 50 percent in the second and to 60 percent in the third year under the weighting system set by the government.

"The government's way of calculating local content does not really indicate the exact figures because it is not based on prices," he said. "If the calculation is based on the prices of components, our vans' local contents would reach 60 percent in the first year of production."

If the Bakrie vans are recognized to have a 60 percent local content level, they will have the right to enjoy fiscal facilities from the government and their prices could be lowered, he said.

Under government rules, producers of multi-purpose vans and commercial vehicles are exempt from import duties on components and luxury sales tax if their local content reaches 50 percent.

Without such fiscal facilities, Bakrie vans will be sold for between Rp 38 million (US$16,170) and Rp 60 million, depending on the specifications requested by buyers.

Aburizal said that preparations started in 1993 with a feasibility study involving European automotive experts grouped in the Singapore-based Global Automotive Design & Technology.

Bakrie Investindo's automotive project director, Basoeki Soebiakto, said the vans will be assembled at the industrial facility of PT Ningz Pacific Motor, a Lippo Group subsidiary where Bakrie Investindo has a 10 percent stake.

The chassis and body plates will be produced by Bakrie Motor and brake systems by PT Bakrie Tosan, while the other components will be ordered from independent companies, including PT Dasa Windu Agung, PT Kayaba, PT Nippon Denso Indonesia, PT Inou Rubber and PT Bridgestone Indonesia.

Aburizal said Bakrie Investindo has invested $15 million in the prototype's development, and will need to contribute another $5 million before manufacturing starts. The company will invest $100 million to establish Bakrie Motor's production facilities.

For the marketing and after-sales services, Bakrie Motor will appoint 26 dealers, required to have their own showrooms and workshops, throughout the country. "We have received dealership applications from 20 companies," he said.