Car makers should use local content
JAKARTA (JP): President Soeharto suggested yesterday that Japanese auto manufacturers increase local components in their cars produced in Indonesia to maintain their market share in the country.
"If the Japanese auto makers meet with local content requirements, they will continue to secure their market opportunities," Soeharto was quoted by the chairman of a Japanese parliamentary delegation, Taku Yamasaki, as saying.
The delegation, consisting of members of the Indonesia-Japan parliamentary body for bilateral cooperation, made a courtesy call on President Soeharto at Merdeka Palace yesterday.
The delegation conveyed a letter from Japanese Prime Minister Ryutaro Hashimoto and documents concerning results of the recent G-7 meeting in France.
Yamasaki noted that the delegation had expressed objections to Indonesia's national car program and asked the government to respect prevailing international trade rules, especially in its national car policy.
The government has granted car maker PT Timor Putra Nasional, owned by Soeharto's youngest son Hutomo Mandala Putra, tariff and tax breaks to produce a "national car" in collaboration with Kia Motor Corp. of South Korea.
Because of its policy, the government has been accused by Japan, the United States and the European Union of breaching free trade principles under the World Trade Organization.
To appease the protesting parties, the government decided to exempt the luxury tax on 1,600cc and smaller cars and station wagons -- in addition to jeeps, minibuses, vans and pick-up trucks produced in Indonesia -- if more than 60 percent of their components were locally made.
Meanwhile, Timor Putra said that its Timor car -- deemed to be Indonesia's "national car" -- will be launched simultaneously at 22 shopping malls and 10 auto showrooms in Greater Jakarta next Monday.
Minister of Industry and Trade Tunky Ariwibowo is scheduled to officially launch the car at the Sarinah shopping center on Jl. Thamrin, Central Jakarta. Other malls to showcase the Timor car include Blok M Plaza, Plaza Indonesia, Pondok Indah Mall (all in Jakarta), along with Bintaro Plaza and Metropolitan Plaza in Tangerang, West Java.
A spokesman for Timor Putra, Mochamad Ilham, told The Jakarta Post yesterday that the company is limiting its auto shows in Greater Jakarta because for the first stage, it will cater to customer demand in that area only.
He noted that the company has also appointed 10 dealers to market Timor cars along with after-sale services. He declined, however, to name them.
"The most important thing is that they must sell Timor cars only. They are not allowed to sell other cars," Ilham said, adding that Timor cars will be sold at Rp 35 million (on the road).
He said 54 Timor cars have arrived from South Korea for the launching purposes, while those for commercial purposes have not yet arrived.
Timor Putra decided to assemble the Timor car in South Korea after it failed to find local existing assembly plants to assemble the cars here. (rid)