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)