Foreign companies to make car parts here
Foreign companies to make car parts here
JAKARTA (JP): As many as 53 companies from South Korea and 22
from Taiwan plan to establish factories in Indonesia to produce
automotive components, says Minister of Investment Sanyoto
Sastrowardoyo.
Sanyoto, who is also chairman of the Investment Coordinating
Board, said yesterday that the intentions expressed by the 75
foreign companies reflect the promising prospect of Indonesia's
automotive industry.
"We hope those companies will soon submit their investment
applications," he told a hearing with Commission VI, for
investment and industry, of the House of Representatives.
The minister said the companies would sell their products both
on the domestic and international markets,
Sugihono Kadarisman, a deputy chairman of the investment
board, said that the intention of the Korean and Taiwanese
companies to establish production plants in Indonesia was made
following the introduction of the country's new car policy in
February.
"The investment projects of the Korean car component companies
will be coordinated by Korea's Kia Motors," he said during the
break in the hearing.
Kia Motors has established links with PT Timor Putra Nasional,
a company controlled by President Soeharto's youngest son Hutomo
Mandala Putra, which has received exclusive rights from the
government to develop the so-called "national" car.
Timor Putra has been granted pioneer status, enabling it to
receive a series of tax breaks, including the exemption of import
duties and luxury sales taxes.
The "national" car, which will use Timor as its brandname,
will be imported from Kia Motors until Timor Putra's assembly
facilities are ready next year.
Sugihono said that Kia Motors, as the coordinator of the
Korean companies, pledged to import part of its production if its
local partner could not absorb all of their Indonesian-made car
components.
At least 50 Korean-made Timor cars are now on display at
shopping malls in Jakarta, carrying a price tag of Rp 35.75
million (US$15,235), far lower than the Rp 65 million for
Japanese cars of the same class.
Hutomo, more popularly called Tommy, said Monday that his
company, which had so far received orders for around 33,000 Timor
cars, would formally begin deliveries in October.
He said that Timor Putra, which will receive the exclusive tax
facilities for three years, expects to sell around 70,000 cars
next year.
Opposition
International automotive companies, notably those from Japan
and the United States, have strongly opposed the special
treatment given to Timor Putra, saying that the government's
national car policy breaks the World Trade Organization's free
trade principles.
Bimantara -- owned by Bambang Trihatmodjo, Tommy's elder
brother and also a local partner of Korea's Hyundai Motor Company
-- also criticized the exclusive rights given to Timor Putra.
Bimantara also applied for pioneer status to develop its own
national car project but the request was turned down.
Minister of Industry and Trade Tunky Ariwibowo has repeatedly
defended the exclusive treatment given to Timor Putra, saying
that similar facilities will be issued only after Timor Putra has
shown a satisfactory achievement.
Sanyoto told the hearing yesterday that Timor Putra, which is
now constructing an assembly plant in Cikampek, West Java, would
invest at least Rp 475.8 billion in developing the "national" car
project.
The country's national car policy has lured more investors to
enter the car component industry despite the opposition, he said.
Apart from the intentions expressed by the 75 Korean and
Taiwanese companies, his office approved 29 new investment
projects in the automotive component industry in the January-June
period, Sanyoto said.
Out of the approved projects, 22 will have a combined
investment value of around 916.61 million and will be run by
foreign companies, while the remaining seven projects, with total
investments of Rp 33.6 billion will be carried out by domestic
investors, he added. (hen)