Bimantara hopes for flexibility, pursues car plan
Bimantara hopes for flexibility, pursues car plan
JAKARTA (JP): President Soeharto's son Bambang Trihatmodjo is determined to compete with his younger brother Hutomo Mandala Putra in the production of national cars.
Bambang, chairman of the well-diversified Bimantara Group, said yesterday that his group will go ahead with its plan to launch a national car, to be called Bimantara, despite the government's refusal to grant it the luxury tax and tariff breaks given to his younger brother.
"We will continue to ask (for tax and tariff breaks), but I don't know if we will be granted the facilities or not," Bambang said after a signing ceremony for the development of a toll road project.
The government announced last February that it would grant tax and tariff breaks to PT Timor Putra Nasional, controlled by Hutomo, to produce a sedan under the Timor brand name with Kia Motors Corp. of South Korea.
Bambang said Bimantara's subsidiary, PT Citra Mobil Nusantara, is cooperating with another South Korean car manufacturer, Hyndai Motor Company, to produce the Bimantara car later this year.
He was quoted by the official news agency Antara as saying last Sunday that his company has earmarked Rp 800 billion (US$342 million) to develop the Bimantara. The company plans to produce 50,000 Bimantara sedans per annum.
He said earlier that the sedans, with 1500 cc or 1600 cc engines, are likely to cost less than Rp 35 million (US$14,970) if his company gets the same exemptions as Timor Putra.
When asked yesterday if his company could survive without government incentives, he smiled and answered, "I hope so."
Minister of Industry and Trade Tunky Ariwibowo said last month that the government would extend luxury tax and tariff breaks to only one car firm, Timor Putra, for three years.
"If limited to one firm only, it sounds somewhat inadequate and monopolistic. What's more, Indonesia's population has reached almost 200 million," Bambang said.
Bambang said earlier that ideally there should be more than one firm developing national cars in Indonesia, as is the case in South Korea. With a population of only 60 million, South Korea has more than two national cars.
Local firms
Apart from Bimantara, a number of local car firms have expressed interest in developing national cars in order to get the duty and tax exemptions.
They include General Motors Buana Indonesia, controlled by Soeharto's half-brother Probosutedjo, and the Indomobil Group, the second largest local car assembler which is controlled by business tycoon Liem Sioe Liong, also known as Sudono Salim.
Bambang noted that the government's new national car policy has caused some grumbling among local car assemblers and foreign car firms.
However, he said, the impact of the new policy will be positive. It will deepen the country's industrial structure, especially in the automotive sector, and reduce its dependency on foreign automotive technologies.
Bambang said development of the country's automotive industry has been very slow during the last 25 years. He added that the industry cannot even reach the program's targeted local content requirement, let alone develop a national car.
Some industry analysts say that the government's national car policy could wash away the "sins" of the existing car assemblers, which they say have enjoyed big profits.
Bambang suggested that local car firms cooperate with each other to develop another national car. (rid)