Exposition features 36 imported cars

Exposition features 36 imported cars

JAKARTA (JP): The Indonesian Automotive Industry Association
(Gaikindo) launched the seventh annual automobile exposition at
the Jakarta Hilton Convention Center here on Saturday.

The exposition is showing 50 of the latest models of 12
different makes of cars.

The nine-day exhibition is promoting 36 costly imported cars
with prices ranging from Rp 40 million (US$19,000) to Rp 250
million.

An Opel Corsa with a 1200 cc engine, for example, is offered
at Rp 40 million, a Mitsubishi Pajero van with a V6 engine at Rp
150 million and a Jeep Cheeroke Limited van with a 190 horse
power engine at Rp 120 million.

Under the June 1993 deregulation package, importers of
assembled cars must pay a 200-percent duty and a 100-percent
surcharge on models which are not yet assembled in this country.

In addition to those levies, domestic sales of cars are also
subject to a 35-percent luxury tax and a 10-percent value added
tax.

Despite the 1993 package, the Indonesian automotive industry
remains heavily protected by government regulations.

Consequently, the prices for locally assembled cars remain
costly for most Indonesians, whose average annual per capita
income is $645.

Analysts estimate that cars assembled in Indonesia cost three
times as much as those in the United States or Australia.

The industry is often criticized by economists for not being
able to generate export earnings because they are operating
inefficiently.

The automotive industry annually imports components worth
about US$1.4 billion, while its average annual export earnings
hover around US$100 million.

Most Indonesian automotive companies, however, deny that they
have received privileges from the government.

"The regulations protect us from newcomers in the industry but
we still must compete with each other," Herman Latif, the
chairman of Gaikindo, said in his speech at the opening of the
expo on Saturday.

Latif also claimed that vehicle producers' payments to the
government in the form of taxes and duties reach about 60 percent
of their sales prices.

Minister of Industry Tunky Ariwibowo said in a written address
read by Director General of Machinery, Basic Metal and Electronic
Industries, Usman Effendi, that the automotive industry is
expected to increase production to 1.5 million units by 1999 from
200,000 units last year. (04)