Bimantara to become second national car manufacturer
Bimantara to become second national car manufacturer
JAKARTA (JP): Another son of President Soeharto is negotiating
a cooperation deal with a South Korean company to become
Indonesia's second national car manufacturer and thereby gain
valuable tax exemptions.
The president's second son, and chairman of the Bimantara
Group, Bambang Trihatmodjo, said yesterday that his group hopes
to start producing sedans with 1500 cc or 1600 cc engines, to be
called Bimantara, later this year, in cooperation with Hyundai of
South Korea.
"The price of the cars is likely be less than Rp 35 million
(US$15,217) if we get the same exemptions as Timor Putra," he
said. PT Timor Putra is the company run by Soeharto's youngest
son, Hutomo Mandala Putra.
Bambang said the plan to establish a car manufacturing plant
was considered after seeing that the government's new policy on
the automotive industry was not limited to a single national car
producer.
Last month the government issued a number of regulations --
consisting of a Presidential instruction, a government regulation
and two ministerial decrees -- exempting imports of components
for cars which will have Indonesian brand names and be produced
by Indonesian companies using domestic technology, engineering
and designs from the luxury sales tax and other duties.
The new rulings came only days after Hutomo, launched the
prototype of a Timor sedan assembled by Timor Putra. The
components for the Timor cars were imported from South Korea's
Kia Motor company.
Competition
Bambang, when asked yesterday about possible competition with
his younger brother, said: "This is not about brotherhood, but
pure business. We are ready to compete."
Bambang acknowledged that the impact of the new policy will be
positive, "but ideally, there should be more than one company.
"In South Korea, with a population of about 60 million, there
are three or four national cars. In Indonesia, with its
developing market, the purchasing power of the public will
increase if prices go down. So, at least three national cars in
Indonesia would be preferable," he said.
Benny Soebianto, vice president of the country's major car
assembling company, PT Astra International, also acknowledged the
new policy would arouse competition.
"Competition is good. It forces us to reduce costs and
increase the local content of our products," he said.
Benny acknowledged that the new policy will have an impact on
Astra's products. "But we still have to study the market before
deciding whether or not we should cut back production. At least,
for now, we are still running at our normal production level.
"If we are forced to cut our current prices, we will do so
because our current cost structure still allows us to do so."
Minister of Trade and Industry Tunky Ariwibowo said yesterday
that the government's new policy on the automotive industry was a
general one, meaning that it was applicable to any car producer
as long as it could meet the terms of the regulations.
"Of course, we must check whether or not the terms are
properly met," he said prior to a cabinet meeting on the economy
yesterday.
Among the requirements, Tunky said, was the need for the
producer to export its products -- including cars and components
-- in the future.
"We can't continue being the market for industrial countries'
products," he said.
Tunky described the policy as a breakthrough which still
needed close monitoring and evaluation.
"We have decided to allow Timor Putra to be the first company
to implement the decree, so we will see how it develops," he
said.
Tunky refused to mention how long the government would monitor
Timor Putra, but asserted that the company would report to the
government on a regular basis.
Responding to reports that the Japanese and American embassies
in Jakarta had questioned the government about the new policy,
Tunky said he had met with the foreign missions and explained the
situation. He said he was not worried about the possibility of a
reciprocal economic sanction.
"The policy is a government decision which everyone must
abide by, and the foreign missions understand that," he said.
(icn/rid/pwn)
Car -- Page 4
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